House of Representatives
18 May 1932

13th Parliament · 1st Session



Mr. Speaker (Hon. G. H. Mackay) took the chair at 2.30 p.m., and read prayers.

page 900

QUESTION

DISARMAMENT CONFERENCE

Mr SCULLIN:
YARRA, VICTORIA

– Has the Acting Minister for External Affairs yet received the full text of the speech delivered by the Attorney-General (Mr. Latham) at Geneva on disarmament?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– No.

page 900

QUESTION

PIPES AND TUBES

Mr HUTCHIN:
DENISON, TASMANIA

– I ask the Minister for Trade and Customs whether the deferred duty on pipes and tubes will operate from the 1st June, as has been understood ?

Mr GULLETT:
Minister for Trade and Customs · HENTY, VICTORIA · UAP

– On the recommendation of the Tariff Board the duty has been further deferred until the 1st September.

page 900

MR. THORBY, M.P

Misrepresentation in “ Labor Daily “.

Mr THORBY:
CALARE, NEW SOUTH WALES

– I rise to a personal explanation. Yesterday, the honorable member for Dalley (Mr. Rosevear) referred to a speech I had made on an earlier occasion, and I took exception to his statement at the time. I now find that I have been seriously misrepresented by the Labor Daily, which published in its issue of to-day the following paragraph : -

The Beans are Spilled. “ The only way that New South Wales can pay its debts is by suspension of child endowment, widows’ pensions, and workers’ compensation “.

This callous admission of the aim of the United Australia party and United Country party, which it is proposed to put into effect by the Lyons and Stevens Governments, was made in the House of Representatives by Mr. H. V. C. Thorby (United Country party), a former State member and colleague of Mr. Stevens.

I am accused of having said that the only way in which the finances of New South Wales could be rehabilitated is by discontinuing the payment of widows’ pensions, child endowment and workers’ compensation. No such suggestion ever emanated from me. The only statement I made which might be misconstrued was that employers Under the relief scheme in New South Wales should be relieved of the obligation to pay child endowment taxation, to furnish returns, and to enter into undertakings for the payment of workers compensation ; but I did not suggest that child endowment should be discontinued or that widows and employees should lose any of the benefits they now enjoy. A vile attempt has been made to misrepresent my attitude, and in view of the explanation I have just made, I suggest that the honorable member for Dalley should retract the statement he made yesterday concerning me.

page 900

QUESTION

GRANTS TO STATES

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– I ask the” Prime Minister whether the Premier of South Australia has claimed from the Commonwealth a grant of £2,000,000 because of the disabilities suffered by that State under federation? Has the Government arrived at any decision in regard to the claim; if not, when will its intentions be announced ?

Mr LYONS:
Prime Minister · WILMOT, TASMANIA · UAP

– The Premier of South Australia has come to Canberra to claim from the Commonwealth financial assistance for his State. He has been in close conference with the Assistant Treasurer (Mr. Bruce) and officials of the Commonwealth Treasury, and the matter will bo considered by Cabinet at the earliest opportunity. Necessarily, it will be considered in relation to the financial position of all the Governments of Australia.

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– In regard to the visits of South Australian and New South “Wales Ministers to Canberra for the purpose of obtaining large sums of money from the Commonwealth, will the Prime Minister give the House the assurance that any grants to State Governments will be limited to the shares of the respective States in the £3,000,000 voted for unemployment, and to grants for disabilities such as have been previously approved by Parliament and within the limits previously authorized, and that no special or other grants will be made to States without the concurrence of this Parliament?

Mr LYONS:

– Commonwealth assistance to States cannot be limited by the proportions that were fixed for the distribution of the unemployment relief grant. Some of the States which participated in that money had never previously received any grant in aid from the Commonwealth. Nor can the financial assistance to States be limited to the amounts approved in the past; we must necessarily have regard to present day needs, but no amount can be made available to any State until the approval of this Parliament has been given.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES

– Before asking (.he question which I wish to address to the right honorable the Prime Minister, I desire to congratulate him upon the honour conferred on him by His Majesty the King, in making him a member of His Majesty’s Privy Council.

At the last Premiers Conference an amount was made available for unemployment relief in New South “Wales equal to half the sum that is to be available to the other States. Now that cordial relations have been established between the Commonwealth and the State of New South Wales, will this Government make the full amount available, and allow it to be expended under the authority of the State Government?

Mr LYONS:

– This morning I conferred on the subject with Mr. Dunningham, Minister for Labour in the Govern ment of New South “Wales, but as that Administration cannot provide £1 for £1 with the Commonwealth without the ap- proval of its Parliament, the Commonwealth must proceed with the expenditure of the £G00,000 that it has made available for unemployment relief in New South Wales. The Government of that State is desirous of co-operating in every way with the Commonwealth, and has undertaken to make available to us whatever clerical assistance may be needed, together with the services of departmental officers who have knowledge of the works requirements of New South Wales. On the recommendation of the Government of New South Wales, the Commonwealth Government, has undertaken to add to the committee, which will supervise the expenditure of this money, the President of the Shire Councils, and the President of the Local Government Association. In that -way town and country interests will both be represented.

Dr Earle Page:

– Will applications for relief have to be made to the Commonwealth or to the States?

Mr LYONS:

– To the committee. It still remains a Commonwealth activity, as this Government is finding the money. There is a complete understanding between the two Governments in the matter, and definite progress has been made by the committee in investigating certain proposals. I expect that, towards the end of the week, a statement’ will be made by the committee as to the works that will be carried out in town and country centres.

page 901

QUESTION

NEW SOUTH WALES ELECTION

Broadcasting Facilities

Mr JAMES:
HUNTER, NEW SOUTH WALES

– During the forthcoming general election in New South Wales will the same “facilities for broadcasting through A class stations be extended to Mr. Lang as the Prime Minister and Mr. Stevens have already enjoyed^ and are likely to enjoy again?

Mr LYONS:
UAP

– The principle laid down by the Scullin Administration, in connexion with the Commonwealth elections, was that two broadcasts should be allowed to the Leaders of the Government parties, and two to the Opposition. I assume that that precedent will be followed during the election campaign in New South Wales. The Commonwealth Government will make no distinction between parties. In regard to the broadcasting of speeches by myself and Mr. Stevens, following the dismissal of the Lang Government, we had no intention of disseminating party propaganda. One Government had just left office and another had been appointed bythe Governor, and the political circumstances of New South Wales had so suddenly and completely changed that I thought it desirable to announce to the people briefly what had occurred, and the attitude of the Commonwealth Government. I had no desire to secure a party advantage.

Mr James:

– Should not Mr. Lang have had the opportunity to reply?

Mr LYONS:

– No ; the official heads of the Governments of the Commonwealth and New South Wales merely made over the air an impartial statement of the facts of the political situation.

page 902

QUESTION

ELLIS ROWAN COLLECTION OF PAINTINGS

Mr WHITE:
BALACLAVA, VICTORIA

– Will the Assistant Treasurer (Mr. Bruce) indicate when the Government intends to remove to Canberra, for display, the valuable collection of Australian paintings by Mrs. Ellis Rowan, the property of the Commonwealth, which are deteriorating in the Treasury vaults in Melbourne?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– The bringing of that collection of paintings from Melbourne to Canberra and displaying them here has not received consideration; but I shall look into the matter, and let the honorable member know the result.

page 902

QUESTION

SALES TAX

Mr BLACKLOW:
FRANKLIN, TASMANIA

– I understand that no tax is charged on the sale of gas and electricity for lighting purposes. Will the Government, therefore, consider removing the sales tax from such products as carbide, which is extensively used in the country for lighting purposes, and so place country residents on terms of equality in this respect with those more favorably situated in the cities?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– The representations of the honorable member will receive consideration.

page 902

QUESTION

FEDERAL CAPITAL, TERRITORY

Dismissal of Government Employees

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

– Is it a fact that some 30 odd employees of the Commonwealth in Canberra have received notice of dismissal? If so, is the Minister for the Interior aware that some of those persons have been in the employ of the Commonwealth for periods of so much as 20 years, and that practically all of them are householders, and have their families in Canberra? Will the Minister confer with the Prime Minister with a view to averting those dismissals, and the consequent removal of so many citizens from Canberra?

Mr ARCHDALE PARKHILL:
Minister for the Interior · WARRINGAH, NEW SOUTH WALES · UAP

– It is a fact that, as a result of reorganization following the establishment of the Department of the Interior, approximately 30 men are superfluous, and have received notice that their services can no longer be retained. It is also a fact that some o f them have had long residence in Canberra as employees of the Government. The Government regrets that there should be any necessity to dispense with the services of anybody, and every possible avenue is being exploited in an endeavour to retain these persons in positions in Canberra.

page 902

QUESTION

LABOR DAILY

attackson Governorof New south Wales.

Mr DEIN:
LANG, NEW SOUTH WALES

– In view of the recent cowardly and dastardly attacks upon the Governor of New South Wales for having done his duty, will you, Mr. Speaker, take the necessary steps to bring about the removal, from the files of the Parliamentary Library of that disloyal, lying and scurrilous rag, known as the Labor Daily?

Mr SPEAKER (Hon G H Mackay:
LILLEY, QUEENSLAND

– The request of the honorable member will be taken into consideration.

page 902

QUESTION

FEDERAL AID ROADS

Mr THOMPSON:
NEW ENGLAND, NEW SOUTH WALES

– In view of the improved relations between the Commonwealth and the State of New South Wales, will this Government reconsider the position with regard to the Federal Aid Roads grant, so that the original intention, namely that all of the money should be devoted exclusively to country districts, may be adhered to?

Mr LYONS:
UAP

– I shall look into the matter.

page 903

QUESTION

SUGAR AGREEMENT

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– Is it still the intention of the Government to review the sugar agreement or, in view of the binding contract entered into by the Commonwealth and State Governments for a three year period from September last, does the Prime Minister intend to allow the matter to stand over until the renewal of the agreement comes up for consideration ?

Mr LYONS:
UAP

– The Government is still desirous of a review of the sugar agreement being undertaken on a voluntary basis. For obvious reasons the Cabinet has not had time recently to attend to the matter, but it hopes to deal with it shortly.

page 903

QUESTION

AUSTRALIAN STOCKS

Mr JENNINGS:
SOUTH SYDNEY, NEW SOUTH WALES

– Is it a fact that, following upon the change of government in New South Wales there has been a sharp rise in the value of Australian loan securities in Loudon? If so, will that not materially affect a favorable loan conversion this year?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– There has been a pro- nounced and sharp rise in Australian securities on the London market. Commonwealth 5 per cents., which are the leading Australian security, have risen between five and six points - from £87 to £92. There has been an average rise in other 5 per cent. stocks of about ten points; generally speaking, from just under £80 to just under £90. New South Wales 5 per cent. stocks have advanced from £69 to £81. A rise of as much as 10 points in any stock is a remarkable happening, and it is impossible not to associate it with recent events in New South Wales. There is no doubt that such a rise indicates renewed confidence in Australian securities. That there should be such confidence is imperative if we are to carry out any big conversion operations in the future.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Has the Assistant Treasurer noticed a report in to-day’s issue of the Sydney Morning Herald in which it is stated that the fall in industrial stock has been greater than the alleged rise in Government stocks? Is that fall also due to the dismissal of the Lang Government in New South Wales ?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– I cannot Understand the honorable member’s reference to the “ alleged “ rise in Australian securities overseas. The. rise is an established fact, which the honorable member may confirm for himself. I have not Seen the report in the Sydney Morning Herald to which the honorable member referred, but I remind him that the price of industrial stock is not governed by political happenings to the same extent as is the price of Government stock.

page 903

QUESTION

IRON PIPES AND TUBES

Tarrifs Board’s Report

Mr PATERSON:
GIPPSLAND, VICTORIA

– Will the Minister for Trade and Customs make available to honorable members the report of the Tariff Board dealing with the proposed deferred duties on iron pipes and tubes ?

Mr GULLETT:
UAP

– I tabled the report one day last week, and moved the motion that it be printed. I have no doubt that it will be available to honorable members very shortly.

page 903

QUESTION

TASMANIAN SHIPPING SERVICE

Mr HUTCHIN:

– In view of the fact that there will be no direct shipping service between the mainland and Hobart from April until Christmas, and having regard to the fact that the shipping calling at this port approximates 500,000 tons a year, will the Prime Minister take such action as may be necessary to remove the restrictions which prevent such shipping from maintaining a passenger service to Tasmania?

Mr LYONS:
UAP

– At the earliest opportunity the Government will take into consideration the whole subject of shipping services to Tasmania, and the effect upon them of the Navigation Act.

page 903

QUESTION

SALES TAX ON SALT

Mr THOMPSON:

– Will the Assistant Treasurer take steps to find out whether the Federal Taxation Commissioner has yet come to a decision regarding the sales tax on salt as it affects country storekeepers?

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– This matter was very fully considered by tho Commissioner, and I was under the impression that a definite reply had been given to the honorable member. Grave administrative difficulties stand in the way of carrying out the suggestion put forward by the honorable member, but if he can suggest any practical method of solving the problem, the Commissioner will be prepared to hear him.

page 904

QUESTION

BRITISH MIGRANTS IN AUSTRALIA

Dr MALONEY:
MELBOURNE, VICTORIA

– Has the attention of the Prime Minister been drawn to the reports regarding the condition of British migrants in Australia which have appeared in newspapers in Great Britain? 1 have before me a copy of Reynolds Illustrated News, dated the 20th March, in which appears an article under these headings: “Australian ‘.Bring us Home’ Cry- Settlers in Pitiable PlightThousands Faced with Starvation - Immigration Scandal.” Would it not be cheaper to send these British migrants back to England than to keep them hero on the dole? Will the Prime Minister communicate with tho British Government with a view to coming to some arrangement for ending this unfortunate condition of affairs?

Mr LYONS:
UAP

– The Government is not prepared to accept, as true, the statements which have been published in British newspapers. British migrants in Australia are being treated in the same way as Australians, and while there is some suffering due to unemployment such suffering is not confined to any particular section of the community. The Attorney-General (Mr. Latham), immediately the articles referred to by the honorable member were published, explained the situation from Australia’s point, of view, and removed the wrong impression which had been created in the minds of English people.

page 904

QUESTION

AMERICAN SHIPPING LAWS

Mr HOLMAN:
MARTIN, NEW SOUTH WALES

– Some time ago I asked the Minister for Markets a question relating to the United States shipping legislation which forbids ships’ of British origin to make two consecutive calls at

United States’ ports during one voyage. .Is the Minister aware that. Honolulu has recently been added, or is about to be added, to the list of ports to which this restriction applies? If that Ls true, will the Minister consider the advisability of putting into force similar regulations in this country against American ships?

Mr HAWKER:
Minister for Commerce · WAKEFIELD, SOUTH AUSTRALIA · UAP

– The restriction applying to foreign vessels trading between Honolulu and other ports in the United States of America is similar to that which applies to British and foreign vessels trading between Australian ports, or between an Australian port and islands which are p”art of, the Commonwealth. There is an impression abroad that further restrictions are lately to be imposed by the United States of America on foreign shipping trading between Honolulu and the mainkind, but, so far as I can gather, there is no foundation for such rumours? There are at present two bills before the United States Senate, introduced by private members, and they both deal with the conditions under which seamen work On ships trading between American ports, or between American and other ports. In neither of these bills are British ships discriminated against. However, the position is being carefully watched by the Commonwealth Government, in conjunction with the governments of New Zealand’ and Great Britain.

page 904

COMMONWEALTH LABORATORIES

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– If it is the intention of the Commonwealth Government to close any of the Commonwealth scientific laboratories established ‘ in various parts of Australia, will he see that the only one in New South Wales - that at Lismore - is not affected.

Mr MARR:
Minister for Health · PARKES, NEW SOUTH WALES · UAP

– This matter has been under the consideration of the Government for some time, and was discussed at the recent Premiers Conference.- No decision has yet been arrived at, however. In the meantime, no laboratories have been closed, and it is not intended to take any immediate action in this direction.

page 905

QUESTION

QUESTION’S WITHOUT NOTICE

Mr LYONS:
UAP

– I ask honorable members, who have any further questions to ask, to place them on the notice-paper or reserve them for another day.

page 905

QUESTION

NEW SOUTH WALES DEFAULT

Mr NAIRN:

asked the Treasurer, upon notice -

  1. Wha t is the net amount of the default of the Government of New South Wales for interest during the term of the Scullin Government?
  2. What is the net amount of such default during the term of the present Government?
Mr LYONS:
UAP

– The answers to the honorable members’ questions are as follow : -

  1. The net amount of default after deducting the regular contribution by the Commonwealth for interest was £4,681 , 192.
  2. The net amount of default after deducting the regular contribution by the Commonwealth for interest was £3,572,47’). From this sum there must be deducted the amount of £695,255 representing the sum recovered by the Commonwealth under the Financial Agreements Enforcement Acts.

page 905

QUESTION

SUGAR AGREEMENT

Profits of Colonial Sugar Refining Company Limited

Mr LYONS:
UAP

– On the 12th May, the honorable member for Bass (Mr. Guy) asked me the following questions, upon notice : -

  1. Is it a fact -

    1. That the Colonial SugarRefining Company Limited has recently announced a dividend of 12½ per cent. for the half-year ended 31st March last;
    2. That against £2,429,000 subscribed by shareholders in cash, the company, in addition to paying high rates of dividends, has issued £7,325,000 of bonus capital, and has returned £3,000,000 in cash to shareholders;
    3. That the paid-up capital of £5,850,000 isnow supplemented by reserves exceeding £8,800,000?
  2. When does he propose to carry out his intention to ask the parties to the sugar agreement to modify it, voluntarily, in view of the economic position of Australia?

I am now in a position to furnish the following reply : - 1. (i) Yes; (ii) Such issues of bonus capital and certain repayments of debentures have apparently been made by the Colonial Sugar Refining Company Limited during the 45 years of the present company’s existence. I am advised that the recent Sugar Inquiry

Committee unanimously reported that this company’s net earnings, after payment of income tax in respect of all its Australian sugar operations for the years 1928-1930 inclusive, were equivalent to 5½ per cent. on the value of all the assets (duly written-down below the largely pre-war costs) and the working capital used in the Australian business. The company’s rate of profit is apparently greater in respect of its Fiji and New Zealand sugar business, and its general financial operations: (iii) The present paid-up share capital of the company is £5,850,000. According to the company’s balance-sheet for the year ended 31st March, 1932, the disclosed reserves are £1,075,000 in the reserve account, and £2,078,937 in the replacement fund - a total of £3,753,937. Possibly portion of the suspense account of £3,037,330 is tantamount toil further reserve, but no authentic information is available on this point.

  1. It has not been possible, owing to the pressure of parliamentary and public business during recent weeks, to take action in this matter, but it is hoped it will now be practicable for the Government to give early attention to it.

page 905

ASSENT TO BILLS

Assent to the following bills reported : -

Emergency Legislation Suspension Bill.

Australian Broadcasting Commission Bill.

Queensland Meat Inspection Agreement Bill.

page 905

CRIMES BILL

Bill received from the Senate, and (on motion by Mr. Bruce), read a first time.

page 905

MR. JOCK GARDEN

Defence Department Records

Mr LYONS:
UAP

– On the 6th May, the honorable member for Gwydir (Mr. Abbott) asked me to make” available papers regarding the employment some years ago of Mr. Jock Garden in the Defence Department, his suspension and subsequent dismissal. The departmental files have been procured, and I now lay them on the table of the House.

page 905

PAPERS

The following papers were presented : -

Naval Defence Act - Regulations amended -

StatutoryRules 1932, No. 44.

New Guinea Act - Ordinances of 1932 -

No. 4 - Appropriation 1931-32.

No. 5 - Mining.

page 906

QUESTION

TARIFF PROPOSALS (No. 3)

Customs Duties

In Committee of Ways and Means: Consideration resumed from the 17th May (vide page 857), on motion by Mr. Gullett -

That the schedule to the Customs Tariff 1921-1930 bc amended as hereunder set out ( vide page 199).

Mr PROWSE:
Forrest

.- The speeches during this debate have all been of a fairly high order. I regret, however, that the tariff reductions indicated in the schedule brought down by the Minister for Trade and Customs (Mr. Gullett) are inconsistent with the promises of the Government and its supporters, and their attitude when in opposition. The criticism levelled at the Minister for Trade and Customs by the Deputy Leader of the Opposition (Mr. Forde) yesterday, was largely justified, because the Minister has not altered sufficiently those high duties which he, when in opposition, severely condemned ; but, of course, the statements of the Deputy Leader of the Opposition were not altogether correct. Bte said that the fiscal policy of the Scullin Government had placed the ship of state on an even keel, but judging by the rocking of that vessel at the present time, his statement can hardly be substantiated. In bringing about that balance of trade to which he referred so crowingly, this country lost in revenue from the tariff £14,000,000 ; Australian stocks declined by 30 per cent., the floating debt of Australia grew from £27,000,000 to £60,000,000; direct taxation increased by 20 per cent., and the budget deficit rose from £1,500,000 to £13,000,000. It, therefore, cannot be rightly contended that the ship of state is on an even keel. The Deputy Leader of the Opposition indicated that every new tariff schedule introduced by the Scullin Government gave employment to hundreds of people, but the fact is that for every four minutes that Government was in power one man lost his job in this country. Every increase in the tariff has brought about an increase of unemployment, and the greatest’ unployment took place during the regime of the Scullin Government. These facts arp startling enough to warrant this Govern ment in giving them serious consideration. The Scullin Government, in making the Australian tariff the highest in the world, unbalanced price levels to an enormous extent. As was indicated by the right honorable member for Cowper (Dr. Earle Page) yesterday, the index-figure for primary products is 118, and that for secondary products 200, which means that the primary producer in exchange for £1 won by his labour obtains only lis. worth of. goods. Every party in this chamber recognizes the importance of primary production to this country. The right honorable member for Flinders (Mr. Bruce) in the declining days of his administration in 1929, made his famous speech in which he said that there must be a downward trend in the tariff, the elimination of overlapping, and a reduction in ministerial and governmental expenditure. He said that in times past depressions were caused by a few bad seasons, but were ended by a good season ; but that it would take more than a good season to remedy this depression, and that we must reduce the cost of production. The Leader of the Opposition (Mr. Scullin), when Prime Minister, publicly announced the absolute importance of primary production to this country. No one will deny that he recognized the importance of the development of our export industries. He asked the farmers to grow more wheat. He said that if they would respond to the call, he would ensure that they would receive a fitting reward for their labour. What is the position to-day in respect of the wheatgrowers and the small wool-growers of Australia? The prices of their commodities have fallen considerably. The national income of this country has fallen from £600,000,000 to £450,000.000 per annum. Our great troubles, as the honorable member for Denison (Mr. Hutchin) said the other day, are that too many people are living in our cities, and that they have too great political power. They are using this power to prevent the distribution of the losses in national income equitably over the community generally, and to force our primary producers to bear the whole of it. Those who hold political power are not prepared to give the primary producers a fair deal.

This tiddly-winking amendment to the tariff schedule is a bitter disappointment to me and to the people of Australia. I can well remember, and can see in my mind’s eye at this moment, honorable gentlemen who are now sitting on the Government benches fighting for dear life in opposition to the tariff schedules introduced by the Scullin Government. The present Minister for Trade and Customs (Mr. Gullett) said that his predecessor in office was engaged, not in tariff-making, but in tariff prostitution. By allowing to remain in force the tariff rates which were then agreed to, the honorable gentleman has now become a party to this tariff prostitution. He seems to be quite indifferent to the injurious effect of this tariff upon the Australian people. The present Minister for the Interior (Mr. Parkhill) was like a jack-in-the-box when the tariff schedules introduced by the previous Government were under discussion. He spoke as frequently and for as long as the Standing Orders permitted him to do in opposition to each item of the schedules tabled by the previous Government. We now know that the honorable gentleman must have been shedding crocodile tears.

The CHAIRMAN:

– Order ! Personal references of that nature cannot be permitted. If the honorable member follows along these lines, and provokes interruptions, he must accept the consequences.

Mr PROWSE:

– It would be a more serious indictment of the Minister for the Interior if I said that he had shed real tears during the tariff debates of last year. He appears to have turned his coat completely.

Mr Archdale Parkhill:

– That statement is offensive to me. I have not changed my attitude inregard to the tariff. I ask that the statement be withdrawn.

Mr PROWSE:

– If my remark is offensive, I withdraw it. I am content to leave it to the honorable members who heard the speeches delivered by the Minister at the time to which I am referring to decide whether such a remark is justified or not. At that time the honorable gentleman was obsessed with a desire to defeat the high duties introduced by the previous Government, but now he seems to be quite willing to allow our primary producers, who are the real wealth producers of this country, to continue to suffer under those imposts. I am glad to hear the honorable gentleman say that his views have not changed, for, if that is so, we may expect him to help us to reduce the duties provided in this schedule.

Possibly the high duties imposed by the Scullin Government had more than anything else to do with its defeat. It was generally believed by honorable gentlemen who were sitting in opposition to that Government, and also by the people of Australia, that when the United Australia party was returned to power the fiscal policy of this country would be altered. I confess that, at that time, I thought that, not only the members of the United Australia party, but also the people of Australia, were beginning to see the light. We know that a committee was formed in another place with the object of resisting the tariff proposals of the Scullin Government. The right honorable gentleman who is now the Leader of the Government in another place, took a prominent part in the setting up of the committee, and during the election campaign he assured the people of Western Australia that if the United Australia party were returned to power steps would be taken to ensure that there would be greater equality of sacrifice, and that the primary producers would be enabled to produce more plentifully so that our export trade would be enlarged and the country be enabled to meet its obligations. I believe that the committee to which I have referred has died a natural death.

I speak feelingly on this subject, because I’ realize the immense importance of an alteration of price levels in Australia to enable the primary producers to continue their work and to ensure equality of sacrifice. We should not hamstring the primary producers. I shall speak plainly. My- sympathies were with this Government; I was glad that it was elected. But I hope that it will fearlessly carry out the policy which the United Australia party advocated on the hustings prior to the election, and will not fall down on its job. It should show some consistency. I could quote from the pages of Hansard of only a year ago, to prove conclusively that many honorable members now sitting on the Government side of the committee were strongly in favour of a downward revision of the tariff. The present Minister for Trade and Customs (Mr. Gullett), for instance, in a speech delivered on the 3rd June, 1931, said -

The total burden involved by the extra duties on great numbers of articles has so increased the cost of production in Australia that wo have been brought to our present position. These costs ure higher than in any other country, and that accounts largely for our present economic position.

If the honorable gentleman feels that this is so, in the name of sincerity why does he not take some steps to remedy the trouble? Instead of doing so, he informed us yesterday that it will bc eighteen months before another tariff schedule will be introduced.

Mr Gullett:

– “What I said was that a complete revision of the tariff would, in my opinion, be through Parliament within eighteen months of the time the Government took office.

Mr PROWSE:

– Well, even that is rather slow action when the matter is so urgent. Evidently the honorable gentleman does not believe in giving any assistance to the wheat and wool growers of Australia, who are to-day selling their goods for less than the cost of production. The honorable gentleman said last year - and I invite honorable members to read his speeches in Ilansard on this subject - that it was important that everything possible should be done to keep people on the land. If that is so, why is he now bolstering up industries which, according to his own statements, can only be bolstered up at the expense of the primary producers? The fact that 97 per cent, of the exports of Australia are supplied by the primary producers shows that the financial stability of this country depends mainly upon the successful cultivation of the land. The first duty of every government should be to see that nothing occurs to hamper rural production.

Yesterday the honorable member for Martin (Mr. Holman) asked the honorable member for Riverina (Mr. Nock) if he could indicate the effect which increased duties had had upon the costs of the man on the land. The honorable member for Riverina could not supply the information offhand, but I have an interesting table before me which shows the direct effect of the tariff on the cost of articles commonly required by farmers. The following table indicates the increased cost in 1930, compared with 1913, of establishing a reasonably equipped farm of 1,000 acres: -

In 1913. the price of wheat was 3s. 9d. per bushel, but to-day it is not more than 2s. 3d. per bushel. The man on the land is faced with great difficulties in compet ing in the open markets of the world with the producers of other countries where the costs of production are much lower than they are in Australia. If the prices of wire and wire netting were within the reach of the man on the land, extra labour would be required in the factories where those commodities are manufactured; but owing to the high prices which now rule, the farmers cannot fully develop their properties, and the factories are unable to find a ready sale for their goods. The Minister, in trying to explain the reason for the reduced demand for galvanized iron, said that because the output was only 30,000 tons per annum, the cost of manufacture was too high; but’ I point out that the origin of the difficulty is the policy of high protection. Australia has not yet learned the lesson which the present depression should have taught. I have no objection to the development of our secondary industries if they can be shown to be of service to the community; but when they bring about unemployment, as they undoubtedly have done, they are a hindrance to progress.

To-day honorable members have received a report relating to the financial position of South Australia. The ‘fundamental reason advanced in that State’s claim for Commonwealth assistance is that federal legislation has proved of great hindrance to the development of primary industries in that State. It is pointed out that production in the export industries has become so unprofitable that the value of exports could not be maintained even with good seasons. It is also stated that the prices of wool and wheat in Australian currency have fallen further than the costs of producing those commodities, and that the high costs in these industries are principally a result of, and are being maintained by, federal policy. That statement has been presented by a Labour Premier, and I hope that honorable members from South Australia will not overlook its significance when they arc asked to vote upon the high duties embodied in the tariff schedule. The statement of the South Australian position continues -

The harmful effects of the Australian tariff upon unsheltered export industries, and upon the finances of South Australia, are fully discussed in paragraphs 79 to 92 of The Case for South Australia, 1930. The general question of disabilities arising from the tariff can now be regarded as established beyond dispute. Opinions expressed in recent years by those who have studied the question are quoted hereunder: -

The Australian Tariff: An Economic Inquiry (June 20th, 1929)

The unequal effects between States are probably, the most embarrassing consequences of the tariff, but they have their roots in the unequal effects between industries, which are natural and inevitable consequences of tariff protection.

The distribution of Australian industries has been substantially modified by the tariff. Assistance to protected industries has been provided chiefly at the expense of the export industries. We have shown that these industries are retarded and that their land values have been curtailed. The costs imposed upon them have been borne chiefly in the country districts and in the outlying States, which are more naturally adapted for the export industries.

The tariff has . . . materially affected the relative prosperity of the different States.

The established producers in these areas and States have undoubtedly been penalized by the tariff. From the point of view of the States themselves the consequences are not less important. Not only have the incomes of the established producers been curtailed, and therefore the taxation derived from land and incomes generally, but some production has been prevented, and the State revenue which would have boon received from that production has been’ lost. This applies not only to tax revenue, but to revenue from various State services, and especially from railways.

Those are facts of which the National Parliament should take heed. At the commencement of federation the grand old State of South Australia was in an excellent financial position; Western Australia’ and Tasmania also were sound. But those three States have been heavily handicapped by federal legislation. The pamphlet setting out South Australia’s case states further -

The cost of the tariff has prevented the full use of the development facilities, and a full response to the State efforts to stimulate production.

Mr. Hill, the Premier of South Australia, draws attention to this passage from the report of the British Economic Commission, which came to Australia at the invitation of the Bruce-Page Government -

The most vexed, and the most important of all Australian questions, that of the combined effects of the protective Customs Tariff and of the legislative enactments, both of the Commonwealth and of the States, for the fixing of wages and conditions of labour.

We have been strongly disposed to the view that the combined operation of the tariff and of the Arbitration Acts has raised costs to a level which has laid an excessive and possibly even a dangerous load upon the unsheltered primary industries, which, having to sell in the world’s markets, cannot pass on the burden to other sections of the Australian communiity, and consequently, as between the various States, upon those, notably Western Australia, South Australia, and Tasmania, which are poor in manufactures and are principally concerned with primary production.

I hope that South Australian and Tasmanian representativeswill have regard to these facts, and assist their States by pressing the Government to reduce the tariff so that a fair deal may be given by the manufacturers to the primary producers who provide their market. If I build a shed on my farm I have to pay £30 a ton for the galvanized iron used in its construction, whereas my competitors in other countries pay only £13. If I erect a vermin-proof fence, 1 pay twice as much for the netting as is paid by my competitors, and my produce has to be carried by sea further than any of the produce against which it competes. To-day the price of wheat is lower than it has been at any other time since the sixteenth century. Cannot we lay aside party prejudices, and co-operate for the rehabilitation of Australia? Members of the Opposition are obsessed by the bogy of a high standard wage. Unfortunately upwards of 300,000 Australians are earning nothing, but those for whom work is available must have the standard wage ! The sooner all parties recognize that this party fetish must be abandoned, the better it will be for Australia. The Attorney-General (Mr. Latham), when Leader of the Opposition, made a fine suggestion, to which I wish his colleague, the Minister for Trade and Customs, would give effect. Condemning the high tariff introduced by the Scullin Government, he said that certain secondary industries which were natural to Australia could be developed economically and efficiently with little protection, and be able, not only to supply Australian needs, but also to export. At one time Australia was able to export agricultural machinery. New Zealand, whose tariff duties average only about 15 per cent., can export goods to Australia, in competition with local produce, despite a 60 per cent. import duty.

Mr PROWSE:

– Yes, but New Zealand is in a better financial position than Australia. There the cost of administration is only 3s. 4d. a head as against 4s. 4d. in the Commonwealth. A leading official of the Commonwealth Government visited a steel products factory in New Zealand and asked the manager, “ How do you get along with such low import duties? Do you not want more protection?” The manager replied, “ To tell you the truth, higher duties would be bad for us ; under the present tariff we have to keep our establishment up to date and efficient in order to produce competitively.” If Australian industries are to develop successfully, they too must be able to produce competitively. There is no reason why the man who makes my plough should be paid a very much higher wage than the man who ploughs my land. There is no justification for the maker of agricultural implements having a protection of up to 200 per cent.., whereas I, who have to pay the high prices which that protection enables him to charge, have no protection, and must compete in the markets of the world.

Mr Lane:

– How would the honorable member deal with the galvanized iron industry ?

Mr PROWSE:

– This Parliament should inquire how many men that industry employs, and what benefit it yields to Australia. How. much extra do the users of galvanized iron have to pay in order to support that industry? Some time ago an estimate was made that the primary producers were paying, through the tariff, £6 a week for every man employed in the manufacture of galvanized iron. If this Parliament has any sense of responsibility it must recognize that such an industry is a hindrance rather than a help to the country.

Mr Lane:

– We are paying much more for the sugar industry.

Mr PROWSE:

– I am not supporting the sugar industry; it is not a natural primary industry. I have no sympathy with the development of any industry, primary or secondary, that is not natural to the country. If the manufacture of galvanized iron in Australia were discontinued entirely, the country would be better off. As the Attorney-General said last year, this

Parliament, when evolving a fiscal policy, should have asked itself what secondary industries were natural to Australia. It would have decided that the iron and steel industry, including the manufacture of machinery and implements, possessed that qualification. Australia has abundant supplies of high-grade iron ore, and good coal-fields near the seaboard. Our industries are afforded a natural protection by the heavy freight charges on goods imported from other countries, and they should be able, not only to supply local requirements, but also to export. Another natural industry is the manufacture of woollens; we have almost a monopoly of the production of the finer qualities of wool. Had we established our secondary industries on a broader basis, and set out to create in Australia another Birmingham, and another Bradford, instead of coddling match factories and other uneconomic enterprises that have merely increased the cost of living and necessitated higher wages, those two industries alone would have employed profitably ten times more men than all these exotic industries that have been raised under the hot-house influence of the tariff. The primary industries also would be helped by an improved local market for their products. Nominal wages might not be so high as they are, but they would have been worth more to the workers, because of their increased purchasing power. The unnatural sugar industry can never be of advantage to Australia. It places a burden of nearly £1 per head on the Australian people, and contributes nothing to the public revenue. Not only do the people of “Western Australia pay an extra £450,000 a year because they are forced to buy Queensland sugar, but the most hurtful effect of this policy is that they could have three tons of sugar for every ton they now buy if they were permitted to trade with their nearest neighbour, Java, whose population numbers many millions. The people of Java would not have asked one penny in cash for the sugar they supplied, but would have taken in payment for it Australian wheat, flour, wool, vegetables and fruit. This trade would have helped the man on the land. Under the agreement made between the British, Commonwealth, and State Governments, £30,000,000 was made available for group settlements. The folly of the present policy is that, having put men on the land, we proceed to destroy their market.

Mr FORDE:

– The honorable member is advocating the purchase of black-grown sugar.

Mr PROWSE:

– That is the stock retort, of the Deputy Leader of the Opposition. If Australia were to do the right thing in regard to its sugar industry it would pay attention to the possibilities of the Mandated Territory.

Mr FORDE:

– That is interesting. Does it represent the views of the Country party ?

Mr PROWSE:

– I am honest in my opinions, whether expressed inside or outside of this chamber. I have not a double policy. The Queensland sugar-growers obtained their best varieties of cane from New Guinea and the Mandated Territory. There is a coloured population in that territory, and they have to live. If we grew our sugar there we should be able to purchase it at half the present price, and at the same time develop those areas. Queensland could concentrate on its dairying industry, and, if the matter of defence is a consideration, we could maintain a standing army in North Queensland of a far more efficient and inexpensive nature than the many Italian hordes which are now there.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr SCULLIN:
Yarra

.- May I congratulate you, Mr. Chairman, on having dispensed with military titles in this committee.

I do not propose to delay the committee at any length, because the Deputy Leader of the Opposition (Mr. Forde) spoke for this side of the committee yesterday, in a very comprehensive speech. As one who was in charge of a government during two years of great difficulty, I am riot concerned at this stage with the quarrels of political parties as to arrangements that may have been made between them in regard to tariff policy. What I am concerned about is that there shall be no disturbance of the tariff policy that was laid down by my Government, which is still essential to save Australia from insolvency.

The honorable member for Forrest (Mr. Prowse) made some extraordinarystatements. Anybody listening to him might imagine that we were only at the beginning of things. The honorable member told us in airy fashion that we should grow our Australian sugar requirements in the Mandated Territory. He urged the Government to dispense with all investments of capital, and with the improvements which are the product of the hard labour of the farmers whom he is supposed to represent in this Parliament - the able-bodied pioneers who hewed bornes out of the jungle, to their eternal credit. The honorable member would wipe them out with a wave of the hand, and transfer their activities to the black labour Mandated Territory of New Guinea. I thought that we had heard the. last of that kind of talk in the National Parliament 30 years ago. However, as 1 do not think that it will influence this committee, I shall not pursue the matter further.

What may influence honorable members more than anything else is the argument that we owe nothing to the tariff for the correction of our balance of trade. It should not be difficult to convince honorable members of the importance to Australia of maintaining a favorable trade balance.

Mr Prowse:

– What does it cost us?

Mr SCULLIN:

– At any cost we must balance our trade. The only alternative is ultimate default. By raising loans overseas, as was done by Australia in the past, we might continue with an adverse balance for a few years, but, ultimately, a nation must crash if its imports continue to be in excess of its exports. Having, established a favorable trade balance, it is ‘ imperative to maintain it. When the Minister for Trade and Customs (Mr. Gullett) introduced the first of his schedules some months ago, he intimated that the reductions in some 60 items indicated the policy of the Government. That has caused great uncertainty in the minds of manufacturers and others. I hope that it does not mean that there are to be drastic alterations of the protectionist policy of the country. I also understood the honorable gentleman to say that our trade balance was corrected by the depression.

Mr Gullett:

– Yes, in the main.

Mr SCULLIN:

– That is a most extraordinary statement. The very opposite is the position. The depression has been created by the abnormal fall in the value of our exports.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Did not the Scullin tariff result in tho closing .of factories ?

Mr SCULLIN:

– An infinitely greater number of factories would have closed had it not been for- the tariff introduced by my Government. The principal thing that saved hundreds of thousands more from being thrown out of employment and factories ceasing to work was the closing of our gates against the flood of imports into Australia.

Mr Gullett:

– Have Australian manufacturers been called upon to supply the imports which the Government prevented from coming in ?

Mr SCULLIN:

– Our manufacturers have supplied a measure, of the commodities previously imported. The fall in the value of our exportable products was the main cause of our depression, for it accentuated our adverse balance of trade.

I can say now what I was unable to say at the time, because of the panic that would then have been caused. My Government would have been faced with default within three or four months after it assumed office had it not taken drastic action to rectify our trade balance. It was absolutely unable to find credits in London to meet the Commonwealth’s obligations. That statement can be corroborated by any Minister. My Government was in office only a week when it received warnings from the Chairman of the Commonwealth Bank. The position was brought about by our having no credits overseas, by the piling up of’ imports in Australia, and by the demand for gold to pay for imported goods. It became necessary to concentrate our gold in the hands of the Commonwealth Bank, and to requisition all gold then in the possession of private banking institutions. That was drastic and revolutionary action, but it was essential if the country was to be saved from absolute bankruptcy and ruin. Our next step was to impose tariff restrictions, embargoes, rationing, and high duties. I spent three solid weeks consulting the officers of the Customs Department, and I pay my tribute to those officers for the service that they then rendered. We examined every item that this country could make or do without, placed embargoes on some, and rationed others. I ask honorable members to examine the list from which embargoes are now lifted, and ask themselves if the importation of one of those items will decrease the cost of production in Australia. There is not one. It is too ridiculous for words to say that wages and other production costs in Australia will be decreased by allowing biscuits, pork, vegetables, eggs and onions to come into the country.

I urge the Government to walk warily before undoing the work that my Government did at tremendous sacrifice to the revenues of Australia. I agree with the honorable member for Forrest (Mr. Prowse) that we lost £14,000,000 or thereabout in revenue. To make up for that loss it was necessary to impose wage reductions on the workers of Australia, which was most distasteful to us, but we did it fearlessly, because it was necessary. If all of that necessary national work is to be undone now on the strength of this tarradiddle tale about the depression being responsible for our favorable trade balance, the sacrifices made by our bondholders, wage-earners, and others has been made in vain. Had I foreseen that a government would come along, throw more men out of employment, and put the country in jeopardy by undoing what my Government did, I should have refused to ask the people to make that sacrifice to save the nation from insolvency.

Mr Gregory:

– Why did you not protect the people who had to bear the greatest burden?

Mr SCULLIN:

– -My Government ensured a reduction in the selling price of any locally-made agricultural machinery before placing an embargo upon its importation.

Mr Gibson:

– A reduction of 5 per cent., which was more than counterbalanced by a sales tax of 6 per cent.?

Mr SCULLIN:

– The sales tax was a separate means of raising revenue from every section of the community. The honorable member was a Minister. Does he say that he would not have imposed a sales tax? Is his idea of the Premiers plan merely the reduction of wages, and not the spreading of the burden by putting it on every section of the community? The plan envisaged increased revenue and reduced expenditure. This was necessary in order to make up the loss of £14,000,000 in Customs revenue, and to save the country from ruin. Our Government inquired into 120 allegations of exploiting the tariff, and not one case was proved. We came across a few cases in which retailers had raised prices, and said that the increase was due to the tariff, but it was found that duties had not been increased on the items affected. In a deliberative assembly like this, honorable members, should not make general charges, but should furnish specific instances. They should come down to facts. When our Government was in office, I asked honorable members to submit instances of exploitation, and said that we would deal with offenders, but not one case was substantiated.

Let us examine the position in regard to the trade balance. This year, it is estimated that our imports will be down to £43,000,000 sterling, while our exports will be £73,000,000 sterling, a surplus of £30,000,000 based on sterling. Calculating Australian currency on the basis of <an average exchange rate of 27 i per cent, for the whole year, the excess of exports over imports is worth to Australia £46,000,000 in Australian currency. Honorable members may say that this result is due to the depression, but I remind them that the purchasing power of a country is based upon the value of its exports, plus any loans which it may be able to raise. In the absence of loans, the country must rely on its exports to provide it with purchasing power for imports. How is it that, for five years preceding the action taken by the Scullin Government, when the average exports from Australia, omitting bullion, were £130,000,000 a year, we could not keep our imports within the limits of our exports, though we are able to do it now when our exports are worth only £73,000,000?

Mr Gregory:

– It is because of our poverty that we are doing it now.

Mr SCULLIN:

– Not at all. Relatively, the people ought to be able to buy the same ratio of imports to exports now as they did before.

Mr White:

– Their purchasing power is not so great.

Mr SCULLIN:

– I have explained that the purchasing power overseas of a community is based upon the value of the country’s exports, plus loans. The steps taken by the Scullin Government prevented traders from getting money out of the country. We forbade the shipment of gold, and we ceased to borrow overseas. We restricted imports, and set up, in conjunction with the banks, an exchange pool from which we took approximately £3,000,000 a month to meet Government obligations overseas, leaving the importers with the balance. That was the practical way in which to regulate imports, and to bring about a favorable trade balance. Yet some honorable members maintain that the same results could have been achieved under freetrade. They say that the cessation of borrowing would have reduced our power to import, as would the falling off in the value of our exports. The increased exchange rate, they say, would have been another barrier against imports. They are partly right, but none of these things, nor all of them, would have accomplished the result at which we aimed, nor have preventedus from being driven over the border line into bankruptcy. I am still fearful that that may happen if our policy is drastically departed from. I desire to see the fiscal position very carefully watched. It is not merely a matter of Australian industry against foreign industry; it is one of Australian national solvency against national insolvency. The honorable member for Forrest made the remarkable statement that he had no objection to Australian secondary industries being established in Australia.

Mr Prowse:

– If they are economically sound.

Mr SCULLIN:

– The honorable member’s statement shows the negative state of his mind on this subject. Why should any one object to establishment of Australian industries on sound lines? The very phrase used by the honorable member indicates the state of his mind, and his antipathy towards Australian secondary industries. We shall never get very far as a nation if we continue to be sectional in our outlook, and to pit country against town, and primary against secondary industries. These are dependent on one another. The best market our farmers can have is the local market, as was demonstrated by the Deputy Leader of the Opposition (Mr. Forde) yesterday. The honorable member for Forrest paid one tribute to our Government. He said that the Scullin Government recognized the importance of the export trade. An honorable member interjected that we told the farmers to grow more wheat. We did, and why? Australia’s finances were in such a condition that it was necessary to increase our exports. We had to get credits overseas in order to save the country from bankruptcy. When there was talk of holding back the wool clip, I had a conference with the growers, and told them that they should consider their own interests in conjunction with the national interests. To their credit, they accepted that view; they did not hold back their wool, but let it go forward regularly to be sold abroad, and to establish for us credits overseas. The Government recommended increased wheat production, because we knew that we could get the quickest results in that way.

Mr Gibson:

– And the Scullin Government promised the farmers 4s. a bushel for their wheat.

Mr SCULLIN:

– We did, and it would have been paid had not the Country party’s representatives in the Senate prevented it.

Mr Gullett:

– Could the right honorable member’s Government have paid the 4s.?

Mr SCULLIN:

– Yes. The farmers’ representatives from Western Australia voted against the bill in the Senate. They said that the Government of Western Australia could not afford to meet any loss which might arise under the guarantee. The Government of Western Australia has paid out more by way of sustenance to the unemployed since that time than it would have had to pay under the wheat guarantee. By accepting our proposal it could have prevented much unemployment. The money paid to the farmers would have circulated throughout the State, and that would have stimulated trade. The real objection to our proposal, of course, was that it would have interfered with the activities of private enterprise, with the buying and selling of wheat, and gambling on the market. We then stuck tenaciously to the proposal for paying the farmers 3s. a bushel for their wheat, and they are now being paid that amount as a result of our efforts. It is true that we asked the farmers to grow more wheat, and I pay them the tribute of saying that they responded nobly to the appeal. When our Government approached the banks with regard to payment of the guarantee of 3s. a bushel, I made the strongest representation that the money should be paid for wheat produced in the year for which I made the appeal for greater production. That request was turned down by the banks, and the money was made available for the current year.

Mr Prowse:

– The right honorable member’s Government let the farmers down.

Mr SCULLIN:

– That is not true. The honorable member for Forrest (Mr. Prowse), when speaking of encouraging exports, said that one of the conditions which could justify the establishment in Australia of a secondary industry would be its ability to export. I maintain that the first thing we should require of an industry is that it should supply the Australian market. After that, we may begin to think of exporting.

Mr Prowse:

– Apparently it should supply the Australian market at any old price.

Mr SCULLIN:

– No, and I remind the honorable member that he can hardly mention an item manufactured in Australia of which the price has not been reduced within the last twelve or eighteen months. That is the answer to his interjection. The honorable member is so obsessed by his freetrade principles that he cannot see facts when they are before him. I agree that it would be a very good thing if we were able to export manufactured articles, but the important thing is first to supply our own market. Let us afford our secondary industries an opportunity of increasing their production before we ask them to go out and meet the cold blast of competition in the outside world.

The right honorable member for Cowper (Dr. Earle Page) said that our policy should be to encourage big industries. Presumably we should allow the smaller industries to go to the wall. I do not accuse the Minister for Customs (Mr. Gullett) of supporting that policy, but he certainly said that the Government’s ideas was mainly to encourage the larger industries. The right honorable member for Cowper stated that we should encourage the large secondary industries, and then have what amounts practically to freetrade in respect to our other requirements. The argument used by low tariff advocates is that costs in general are increased by the tariff, which, in turn, leads to higher wages, higher costs of living, and a general all-round increase of prices which, in the end, leads to a demand for a still higher tariff. If we examine the formula according to which the basic wage is calculated, we find that the largest single item is rent, and after that comes farm produce - in other words, food.

Mr Hutchin:

– Building costs enter largely into the matter of rents.

Mr SCULLIN:

– To some extent; but a man does not buy a house every year. There are in my electorate, and in other industrial suburbs, men paying 25s., 30s., and as much as 35s. a week for houses that were built 30 or 40 years ago. In some cases, the men who built the houses have been dead long since.

Mr White:

– The landlords are lucky to be getting any rent.

Mr SCULLIN:

– In some cases the tenants are unable to pay rent, but the rent they ought to be paying is taken into consideration in calculating the cost of living. Bents are higher to-day because of the boom which occurred years ago. The protection afforded to Australian * timber is a comparatively small item in the cost of building, yet rents are a very big item in the cost of living. When honorable members speak of the effect of tariffs in raising the basic wage, they carefully omit to say anything of the high costs of distribution, of the profits that are made by those who intervene between the manufacturer and the consumer. In a boot factory I saw boots turned out at the wholesale price of 12s. to 14s. a pair. The labour cost was less than5s., but the same boots were retailed at 30s. or 35s. a pair. The greater part of the difference between the wholesale and retail price went to pay rent to landlords who had erected buildings on land for which they paid £2,000 a foot. In the Wimmera district fanners are trying to make a profit by growing wheat on land for which they paid from £25 to £30 an acre. It is not possible for them to do so. Yet honorable members would blame protection for high-production costs, and would reduce duties and sweat the workers. The problem should not be attacked from either of those angles.

Reference has been made to small industries growing up under tariff protection. Probably the tobacco-growing industry is included among these, and I shall have something to say on that when we come to the item. There are others, however, who have received unfair treatment in the revised tariff schedule. I do not propose to attack the Minister in this regard, because he has met me fairly, and I hope will, in regard to one industry, at any rate, remedy what I believe was a mistake. We should not underrate the small industry, because the accumulation of such industries provides employment for a large number of men. When my Government was in office, increased protection was granted to the manufacturers of cork board in Australia. The matter was referred to the Tariff Board twelve months ago, and certain figures were submitted by the manufacturers regarding costs of production. The board reported adversely against the protection. Within twelve months, by means of scientific research, the manufacturers, who are an efficient body of men, were able to reduce the cost of production by 25 per cent., and the benefit of every penny of that reduction was passed on to the public. The manufacturers produced an article which was tested at the Brisbane University, and was found to be superior to the best cork board imported from Spain. Since the protection has been removed, the industry has been unable to carry on in Australia; it has been closed down, and men have been put out of employment. Before protection was granted, the price of cork board was1s. 2d. a square foot, but, owing to the efficiency with which the local manufacturers produced the article, the price was reduced to 10½d. a square foot.

Mr Watson:

– We paid1s. 3d. a square foot for it the other day.

Mr SCULLIN:

– It is being quoted in two places at 10½d. a square foot. Before the duty was reduced this article was being sold at 10½d. per square foot. From pre-war years to the present time, the price in Australia was 1s. 2d. per square foot; but when the local manufacturer started, the price was reduced to 10½d. per square foot. The merchants who imported this article kept stocks in store, and when there was an urgent order for it they charged any price they liked. Before the war, the price was1s. 3d. It was1s. 2d. before the duty was imposed, and afterwards it fell to10d. and 10½d. per square foot. In order to crush local competition, the importers are now offering this article at 9½d. per square foot; but the same importers are charging 10½d. per square foot in New Zealand, in which country there is no local competition, and a low rate of exchange. That shows that once the local manufacturer is forced out of business the price will be increased. That is one illustration of a reduction in price taking place after the imposition of a duty. The factory has now been closed. It was employing 25 men, and that means that 25 families were depending upon it. Those men have been forced to join the ranks of the unemployed. That is the direct unemployment caused by the closing of the factory. But there are 100 other men indirectly affected. The closing of this industry will also affect the cork-cutting industry by abolishing its market for its surplus material. The waste in that industry is over 60 per cent., and it is likely that it will also close down. I am putting these facts before the Minister, hoping that the representations of honorable members on this side will have some effect. I rose mainly to draw attention to the serious position of this country. I know how close we are to the brink of disaster. We must save this country from default and ruin. I urge the Government not to allow Australia to return to its perilous position of a few years ago.

Mr GREGORY:
Swan

– I congratulate the honorable member for Indi (Mr. Hutchinson) upon his speech on this subject last night. It, undoubtedly, necessitated a great deal of research on his part, and I was pleased to hear him say that in a young country like Australia freetrade would not be a good policy; that there should be a certain measure of protection to enable secondary industries to be established and employment found for our people. Unfortunately when concessions to certain industries are asked for undue preferences are sought and exploitation and corruption follow. The question is what measure of protection should be given. I hope that in the near future we shall have a definite statement from the Government so as to enable us to decide between the low tariff, the moderate tariff, and the prohibition policies. The Government in. introducing its tariff proposals has shown that it is in favour of prohibition, although that policy is detrimental to the best interests of the people of Australia. I, myself, should not object to a tariff against Britain of from 15 per cent, to 25 per cent. Our people are well educated, and live in a glorious climate. Why should not we be able to carry on industries as well as any other country? The trouble is that industries in this country are hampered by the high tariff, the monopolies given under it, and the consequent restraint of trade. Were it not for those handicaps we would be able to emulate the people of Canada, in which country wages are higher than they arc here. Surely we should be able to export secondary goods. There is something wrong with this country, and I am afraid the fault lies with this Parliament. We hear many arguments from people who know nothing about industry. The- speeches of honorable members on the tariff are coloured by the views of their constituents. Little consideration is given to the effect that it has on the people generally. We cannot carry on and still tax the big basic industries. The costs of production and living must be reduced. As far back as February, 1929, huge tariff imposts were placed upon the people of this country. Subsequently further increases in duties were made by the Scullin Government. No parliamentary authority has been given for that taxation. The people have had to suffer higher duties, embargoes, .a surtax of 50 per cent, on certain goods, and a primage duty of 10 per cent. When the election was approaching, Parliament validated the tariff until the 29th February of this year. This Government is adopting a. similar procedure, and probably three or four years will pass before Parliament will be able to decide what taxation should be imposed by the Customs Department; .upon the people of Australia. When we went to the conn try I thought that if the Nationalist party and the Country party were jointly returned to power there would be a substantial reduction in the tariff. We had the assurance of government supporters, when they were in opposition, that they would refuse to allow the people to be taxed without parliamentary authority. When the tariff was being discussed in this chamber, they supported my amendment to the effect that no tariff schedule should have effect unless approved within 90 days of its introduction. They now seek to avoid the fulfilment of promises made while in Opposition. These taxation burden’s are destroying all hope of approaching that equilibrium which should exist between primary and secondary products. It is monstrous that this Government should still favour these tariff proposals. It is two and a half years since the Scullin Government brought down its tariff schedule, and now we are told that some action will probably be taken in about eighteen months time to deal with it.

Mr Gullett:

– That is not a fair statement.

Mr GREGORY:

– The Minister himself, the Attorney-General (Mr. Latham), the Minister for the Interior (Mr. Parkhill), and the Minister for Commerce (Mr. Hawker) all supported my amendment to the effect that no tariff schedule should be effective unless approved by Parliament within 90 days of its operation.

Mr Gullett:

– We are well within that period at present.

Mr GREGORY:

– The Minister is forgetting that the tariff which wasintroduced two and a half years ago has not yet been approved.

Mr Gullett:

– I am not responsible for that.

Mr GREGORY:

– This Government is responsible for continuing that tariff. The Minister has brought down two new tariff schedules, and he proposes to deal with one or two items, and to adjourn the consideration of the others until some future date. Goodness knows when we shall deal with them. There has been side-tracking in connexion with the amendment to the Customs Act in regard to embargoes. The supporters of the Government, when in opposition, advocated the removal of embargoes unless given effect by regulation ; yet the embargoes put into force by the Scullin Government are still to remain. Has the Minister any political consistency at all? Has he any political conviction outside of sticking to office?

Mr Gullett:

– I take strong exception to the particularly offensive remark of the honorable member for Swan (Mr. Gregory).

The CHAIRMAN (Mr Bell:
DARWIN, TASMANIA

– I ask the honorable member for Swan to withdraw the remark to which objection has been taken.

Mr GREGORY:

– I withdraw it. In 1927 the then Minister for Trade and Customs (Mr. Gullett) stated -

There is no greater illusion than that the restriction of private enterprise as far as federal taxation is responsible for it, is due in the main to income and land taxation. It is not. Most of the handicap is the result of the excessive and rapidly-growing taxation through customs and excise. More than that, this indirect taxation is the root cause of most of our ruinous industrial unrest, of the high cost of living, of the sinister and heavy falling off of the number of men employed in the cultivation of crops in Victoria and New South Wales, and for the clamour for higher and still higher duties.

In view of that statement, how can the Minister now ask honorable members to approve of his present policy? The Prime Minister (Mr. Lyons), when at the Sydney show, clearly stated that the cost of living and production must be reduced, and he gave the people to understand that there would be some reform in that direction. He has failed to carry out that promise. In 1929 the right honorable member for Flinders (Mr, Bruce), now Assistant Treasurer, stated how essential it was that Australia should reduce its cost of living and production. When the election took place two years ago, there was no doubt where the manufacturers stood. They paid the bill for the Labour party in connexion with that election. They stood behind that party. Before this election, there was a meeting in Melbourne, and a compromise was effected between the leaders of the United Australia party and Mr. McKay. Mr. McKay gave his blessing to those parties. The result was that they were able to win a few additional seats, but at what a sacrifice! I understand that Mr. McKay is going to Ottawa to assist us in getting concessions from Great Britain. I hope that any concessions obtained there will not be similar to those obtained by that gentleman from this Government.

Australia is a debtor country. The Leader of the Opposition (Mr. Scullin) referred to our adverse trade balance, and to his action in rectifying it. I admit that some action in that direction was necessary, but the Labour party, in introducing its tariff schedule, made no attempt to protect either the workers or the producers of Australia by ensuring that no unfair advantage would be taken of the imposition of embargoes and increased tariffs. Costs generally increased, and were maintained at a high level. The main reserves of Australia are its basic industries, and if they were destroyed, the whole country would be destroyed. We should encourage the wheat, wool and metal industries, because if they fail, what hope is there for the dwellers of the city. We have had a protection policy since 1900. At first it was clearly understood that duties were necessary to enable baby industries to reach man’s estate, but once that point was reached, the duties were to be withdrawn. That has not taken place. We have had application after application from members of Parliament for duties on various articles. The duties in Australia are from 50 to 75 per cent, higher than in any other part of the world. We have absolutely destroyed all hope of reaching the equilibrium which should exist between primary and secondary products. A monthly circular, issued by the Bank of New South Wales, contains a chart showing how the price levels of primary and secondary products have varied. The index figures in 1928 were in agreement, but in 1931 the index figure for secondary industries had increased to about 192 while that for primary industry had decreased to 113. It is said that we should keep up the price level of our exports, but how can we possibly do that except by the payment of bounties - and we cannot afford to pay bounties. It might be possible for us to keep up the price levels of the goods we sell in our own country, but we cannot possibly do it with goods for export, except, as I have said, by the payment of bounties, which is an irregular method that should be adopted only as a last resort. It is impossible to restore, by any policy of manipulation, the equilibrium that existed before the present high tariffs became rampant. We have suffered a catastrophic fall in our export prices. But it is remarkable that, although wages have fallen very greatly in our sheltered industries, there has been no commensurate reduction in the price of the .goods manufactured. Honorable members of the Labour party in this Parliament would be well advised to look into this subject. When heavy reductions occur in the wage rate in factories, a -substantial reduction might reasonably be expected in the wholesale prices of manufactured goods, but that has not been, our experience. High price levels have been maintained by agreement between the combines of manufacturers and the trade unions.

The Leader of the Opposition (Mr. Scullin)’ drew attention this afternoon to the boot industry. He said that boots which cost 12s. 6d. to make in the factory involved a labour cost of only 5s. a pair, yet the retail price of those boots in the shops was from 30s. to 35s. a pair. Things like that happen because we have destroyed competition, which is one of the finest assets of the nation. In destroying it, we also opened the door for combines to take advantage of our legislation, by secret agreement and - coercive methods, which would be impossible if it were not for political and departmental favour. Since 1920, manu facturers and trade unionists have exploited every possible legislative power in the interests of those engaged in these sheltered industries. High tariffism embargoes, and undue ministerial powers, have degraded politics, encouraged corruption, foisted arrogant and unscrupulous combines upon our trade, and made Canberra the resort of impudent lobbyists, and Parliament the consorting place of Tammany.

A tariff board is being appointed in Great Britain, and Mr. Baldwin has said that every care would be taken to see that there were no “ crooks corners “ in connexion with it. If that gentleman had had any knowledge of what has happened in Australia since the passing of our Tariff Board Act in 1921, and the passing, later, of the Australian Industries Preservation Act, under which extraordinary powers were given to the Minister for Trade and Customs and the officers of the Department of Trade and Customs, he would not have made such a statement. The exercise of those powers has already had the effect of corrupting a large section of the community, which, on every possible occasion, seeks concessions, careless of bow others, or the nation, may be affected.

What action does the Government propose to take to remove the shackles which are hampering industry ? Although many honorable gentlemen who are now sitting on the Government side of the chamber resisted the imposition of embargoes by the Scullin Government, many of those embargoes are still in force ; and the surcharge of 50 per cent, which was also objected to still remains on many items of the tariff. There is now an additional protection of 25 per cent, in exchange, 10 per cent, in primage, which often works out at 15 per cent., and 6 per cent, in respect of sales tax, which, on one invoice that I received, worked out at 16f per cent. ; yet honorable members opposite .are offering no objections. It is amazing to me that the Government is allowing protective duties which vary from 100 per cent, to even 1,000 per cent, to remain in -force, and is still imposing dumping duties in respect of any goods which may come into competition with Australian products.

In Western Australia and in many parts of Victoria, New South Wales and

South Australia, the rabbit menace is a grave danger to our primary industries. We need wire netting, rabbit traps, poisons and so on. But all these items are subjected to a heavy duty, excepting wire netting. It has been boasted that wire netting is admissible free, except for primage duty. I went through the Tariff Board report which was made at the time it was proposed to apply the provisions of the Australian Industries Preservation Act to wire netting, and the statement was made in it that 75 per cent, of the wire netting manufactured in Great Britain was used there. I cannot understand how the board ever accepted such a statement. It compared the price per roll in England with the export price per mile to Australia, and recommended that a dumping duty be imposed if the landed cost of English netting was less than the price fixed by the Australian maker. Such a recommendation was nothing less than scandalous. It is extraordinary that, although wire netting is supposed to be admitted free, when the “Wester u Australian Government imported 352 miles of it at a landed cost of £7,900, a dumping duty was demanded and since then no netting has been admitted to Australia without the payment of dumping duty if the landed cost was less than the Australian maker’s price. I have a British price list which shows that wire netting is quoted c.i.f. and e. NewZealand and South African ports at approximately the same price as the Australian f.o.b. price, a difference of about £5 a mile.

Mr Paterson:

– If it is sent here at a cheaper rate than that at present prevail-‘ ing, is not the dumping duty brought into force?

Mr GREGORY:

– Yes. I had a letter from an English manufacturer some little time since, in which he said that if they reduced the price of wire netting to Australia, the Government got the benefit of it. They felt that they might just as well have the extra, profit as the Australian Government, and so they adjusted their prices accordingly.

It is said that we should build up an export trade in secondary manufactures; but how on earth can that be done under existing conditions ? A request was made the other day for the imposition of a higher duty on garden tools. The first argument advanced by the manufacturers in support of the increased duty was that the steel for the manufacture of these goods cost £14 a ton in Australia, and £5 a ton in Great Britain. “We have the finest iron ore deposits in the world at Iron Knob, in South Australia, and the Broken Hill Proprietary Company boasts that its plant and the workers which it employs at Newcastle are equal to the best in the United States of America. It is also boasted that it takes 2 tons of ore in Great Britain and 2.8 tons of ore in Germany to do what 1 ton of Australian iron ore will do. The coal-mines of Newcastle are right alongside the iron works.

Mr James:

– What about the wages paid in the United States of America and Canada ?

Mr GREGORY:

– The wages in Canada and the United States of America are higher than in Australia.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– What about the purchasing power of the people of Canada ?

Mr GREGORY:

– It is equal to that of the people’ of Australia. It will be remembered that the late Mr. Robb, in his budget speech in the Canadian Parliament in 1929, pointed out that after the war the Canadian Government had succeeded in reducing costs, had reduced taxation by 220,000,000 dollars, had paid 330,000,000 dollars off its war debt, and had built up an export trade in secondary products which, in 1929, was double the export trade in 1914. Mr. Bennett, who was the leader of the succeeding government in Canada, being a protectionist, introduced higher duties. But, even then, the duties were very greatly below those operating in Australia, I give the following comparisons : -

I do not think that Canada has very valuable deposits of either coal or iron ore. Certainly they are not comparable with ours, which, in each case, are claimed to be the richest in the world. How is it, then, that Canada can manufacture agricultural machinery, pay higher wages in the industry than are paid in Australia, meet a duty, not of 25 per cent, as the Minister said, but of 45 per cent., plus 4 per cent., plus primage and sales tax, and exchange, and yet compete successfully with Australian manufacturers of certain, classes of machinery? “What is wrong with our workmen and manufacturers that such a thing can happen? Is it because people have only to come to this House and ask for a duty to get it ? Whenever a proposal is- before Parliament for the imposition of now duties, we know that interested persons simply swarm in this building. It is a grave thing for us that overseas manufacturers can compete successfully against Australian manufacturers under conditions like these. Why is it that Mr. McKay has had to take Australian capital, Australian engineers, and Australian patents to Canada, where they pay’ higher wages than in Australia, in order to recapture the Argentine trade which his firm formerly enjoyed? Why could not the implements required for the Argentine be manufactured in Australia?

Mr Makin:

– What about bridgebuilding?

Mr GREGORY:

– The honorable member is always bridge-building! It is because of the tyranny of the trade unions and the agreements of manufacturing combines that our people have been exploited, and that our products cannot be exported under reasonable conditions. So long as we continue our present policy the existing unsatisfactory state of our manufacturing industries must remain an offence to us.

It is not only in relation to wire netting and agricultural implements that this state of affairs prevails. It is impossible for our secondary industries to carry on while we impose conditions which make the cost of their raw materials so’ excessive. If it costs a manufacturer £14 for material which costs his English competitor only £5 a ton, he is in an impossible position. I have a return relating to the cost of various agricultural machines. It shows that harvesters which could be imported into Australia for £1,000 in 1929 would now cost, without exchange, surtax, and primage, £2,355. Taking £1,000 as the basis again, the present figure in relation to other implements- would be - Reapers and binders, £2,478 ; mowers, £2,581 ; and oil engines, £2,592. The cost of £12,000 worth of machinery is increased to-day, when we take exchange, sales tax, primage surcharges, and other inevitable expenses into consideration, to £28,223. A reaper and binder which can be made in Canada under high-wage conditions, and freighted 2,000 miles, can be sold to the Canadian farmer for £44, but a similar implement costs £68 in Victoria and £72. or £73 in Western Australia. I have had figures prepared showing the cost of developing a 1,000-acre farm under the conditions prevailing in 1913, when wheat was 3s. 9d. and wool £13 13s. Id., and in 1930, when wheat was ls. lOd. to 2s. a bushel. The details are as follow: -

Work and material that in 1913 cost £1,000, ‘ now costs £2,460, while price levels for the resultant products are fully 50 per cent, lower. We are in difficulty with small, as well as with large, manufacturing industries. Take the case of axe handles. When I was a young fellow these could be bought for 9s. 6d. and 10s. 6d. a dozen, and were sold for ls. 3d. each. To-day they cost 41s. a dozen. A project was set on foot some time ago for the manufacture of shovels in Australia, and in the course of time a fairly good shovel was made. But not long ago some genius conceived the idea of making shovel handles here. A fairly heavy duty was put on them, with the result that the handles were useless to the manufacturers, and the industry was destroyed.

I could give numerous examples of the effects of the present fiscal policy. When the f.o.h. price of British woollen vests was 5s. 6d. per dozen, the duty was fixed at 500 per cent., and the impost on boys’ cardigans amounted to 250 per cent. On children’s BOX, which could be landed in Melbourne at 4s. 9d. a dozen, the rate of duty was 425 per cent. On cotton stockings, costing 5s. 9d. a dozen, an impost was levied of over 500 per cent. Can we wonder that when boots, which are turned out by the manufacturers at 12s. 6d. per pair, reach the purchasers, the price is from 30s. to 35s. per pair? A similar disparity between wholesale and retail prices is observed with regard to most foods and also with respect to medicines and poisons required for rabbit extermination.

Mr Makin:

– What sort of labour conditions must apply in factories where hosiery is produced at os. 9d. per dozen?

Mr GREGORY:

– A large quantity of cheap goods is required to meet the needs of the poorer sections of the community. The honorable member should recognize that the value of wages is determined by their purchasing power. It is of no use to establish industries in Australia if they prove a curse to the poorer sections of the community. Wages can not be raised beyond the point at which secondary industries can supply goods at prices which the people can afford to pay.

Mr Makin:

– But we should not encourage sweated labour.

Mr GREGORY:

– I have heard complaints on that score recently. If one looks up the files of the Melbourne Age between 1893 and 1895, one may read of the deplorable conditions then experienced by workers in Victoria, compared with the conditions enjoyed by operatives in New South Wales under freetrade.

The building up of the mining industry, particularly at the present time, would be of inestimable value in providing increased employment. I am not referring only to the mining of gold; I have particularly in mind the production of base metals. Since the increase in the value of gold, owing partly, but to no considerable extent, to the payment of the gold bounty, over 2,000 more workers are employed in Western Australia this year than last year, and those miners provide indirect employment of 10,000 other workers. The recent activities on the Wiluna gold-field involve operations 400 miles inland, and this has proved a difficult field to work. The company wrote to the Commonwealth Government - and a copy of the letter was sent to the British Government - -stating that it had made every possible effort to purchase its requirements in Australia, but owing to the methods of treatment that had to be adopted, involving the use of highpowered machinery, it was essential to import a large portion of its plant from Great Britain. It was hoped originally to treat 40,000 tons of ore monthly. The company pointed out that it had paid to the Commonwealth authorities over £100,000 in duty alone. That is not the way to build up industries.

The cost of machinery in this country for the establishment of factories is- out of all proportion to the charges ruling in other countries. Take the balancesheet of the Mossgiel Woollen Mills in New Zealand. Despite a duty on woollen manufactures of 20 per cent, against Great Britain, and a 35 per cent, duty against foreign countries, as against the Australian tariff of from 100 to 400 per cent., that company yielded a 10 per cent, dividend and a 10 per cent, bonus in 1927, and last year it again declared a dividend of 10 per cent. It had £13,200 in its employees’ benefit fund, and £57,000 in cash and government securities. There is something wrong when Australian manufacturers cannot show similar results, and we should endeavour to discover the reason for our present position. I contend that the explanation is to be found in our high duties, and in interference on the part of trade unions. I believe that slowing down is indulged in by employees. We cannot continue this policy without impoverishing the workers of this country and creating antagonism on the part of other nations, which naturally impose retaliatory tariffs. Australia sends a good deal of macaroni from Melbourne to New Zealand, and on looking at the New Zealand tariff, I notice that macaroni from Great Britain is admitted free, that from foreign countries carries a duty of 20 per cent., and the tariff against Australia is 30 per cent. This discrimination against Australia affords a striking example of the evil effects of our fiscal policy. The following illuminating statement emanated from the recent world economic conference at Geneva: -

No machinery for the settlement of international disputes can be relied upon to maintain peace if the economic policies of the world so develop as to create, not only deep divergencies of economic interest between the different masses of the world’s population, but intolerable injury and injustice.

Apparently Australia desires to intensify this injury and injustice. The cost of living and the cost, of production must be reduced, otherwise all industry will be paralysed ; destitution and impoverishment will result, and future generations will curse the fatuous policy and dishonest methods which have destroyed a great nation to which nature has been lavish and generous.

I desire to give the present Government the fullest possible support, but I arn waiting to see its attitude to the tariff schedule. If it is guided purely by political considerations, and does not recognize the seriousness of the economic position in Australia, I shall have to oppose it. If I find the manufacturers continuing to exercise a strong pull on the Government, I shall use every effort, no matter what the effect may be, to give first consideration to the interests of those whom I am sent here to represent. They are mostly exporters of primary products, and they have to compete in the world’s markets against low-wage countries. If their interests are not considered, I shall do all 1 can to denounce and destroy this Government.

Mr PATERSON:
Gippsland

.- Many different views have been expressed regarding the tariff generally, and there are still some honorable members, though fewer than formerly, who consider no duty to be too high, and no embargo to be unreasonable. Such are the right honorable the Leader of the Opposition (Mr. Scullin), the Deputy Leader (Mr. Forde), and other honorable members who sit with them. There is, however, a considerable number of members in this new Parliament - and there is, I believe, a growing number of people outside this Parliament. - who regard this great trade weapon, the tariff, as a two-edged sword, which, if not used with care and dis crimination, may inflict very grave injury upon the community generally. This weapon certainly was not employed with wise discrimination and restraint by the last Government^ During its regime, the tariff wall was built up to a height almost greater than that attained in any*other country; before one row of bricks had had time to set, another row was superimposed upon it. The trend of our tariff legislation was illustrated by the honorable member for Riverina (Mr. Nock) in the excellent speech which he delivered last evening, when he pointed out that in 190S there were eight tariff items or sub-items on which duties of 40 per cent, or over were imposed, that in 192S that number had grown to 259: and that during the regime of the Labour Government, which recently went out of office, the number increased to nearly 600. Many of these items carry fixed rates, in addition to the ad valorem duties. Indeed, some of the duties which had been in operation during the time when the late Mr. Pratten was Minister for Trade and Customs were simply amended by substituting for the word “ or “ the word “ and “, with the result that the fixed and the ad valorem duties operated simultaneously. A much larger proportion of the fixed duties in operation today, however, are alternative to the ad valorem rates, and often the fixed duties bear no resemblance at all to the ad valorem rates. It seems to me that the fixed rates are liable to deceive the Parliament as to the extent of the protection being given. “

In the last Parliament, it was practically impossible to obtain from the Minister of ‘ the day, who is now the Deputy Leader of the Opposition, any information regarding the percentage of duty which certain fixed rates represented. I shall give honorable members one striking illustration of this anomalous position. The general tariff imposed by the Scullin Government on steel split pulleys was 15d. per inch, so t*hat a 12-inch pulley carried a duty of 15s. I asked the Minister the price at which they could be imported from Great Britain and elsewhere, so that the committee would have some idea of what percentage the fixed duty would represent. I moved an amendment, the division bells rang, and honorable members who then eat on the Government side trooped into the chamber. In most cases, they were unaware which item was under consideration, they knew nothing about’ the amendment, and they were even ignorant of the fact that an amendment had been submitted; yet they were content to vote with the Government. The Prime Minister of the day suggested that steel split pulleys could not be imported for 7s. 6d. each, so I sent a telegram next morning to the secretary of the Australian Association of British Manufacturers asking to be informed of the f.o.b. price. The reply received was that British pulleys of 10-inch diameter were 7s. Id. each f.o.b., while Australian-made pulleys of the same size were 34s., less 15 per cent., which is 28s. lid., or four times the British f.o.b. price. Pacts like those are concealed under the system of fixed duties, but if ad valorem rates only were imposed such facts would be disclosed.

Let me furnish a further instance of the tremendous height to which fixed duties can push customs taxation. The Lister separator, made in Great Britain, is selling in Australia freely in competition with separators from Sweden and other countries, which specialize in. that class of machinery. The firm of Lister, sent’ out with a number of separators 2,000 show cards printed in Great Britain. Obviously the firm when buying these cards by hundreds of thousands could have them printed more cheaply than could a single agent in Australia obtaining his requirements from a local printer. The invoice value of the show cards was £24 10s. They weighed 960 lb., and were admitted at a fixed rate of ls. per lb. or £4S. This i» one of the items to which the 50 per cent, surcharge applies, so £24 was added on that account, making the duty £72. On top of this was primage duty amounting to £2 13s. lid., making a total impost of £74 13s. lid., on printed matter valued at £24 10s. I have not included sales tax, because it applies to all articles, whether locally produced or imported. The duty charged was therefore three times the f.o.b. value of the show cards, which shows the danger of having a fixed rate of duty.

Not only does the tariff include a large number of duties of 40 per cent, and upwards, some of them having in addition fixed rates and others optional fixed rates, but there were, until recently, 132 items, and sub-items, to which the 50’ per cent, surcharge applied. The present Minister for Trade and Customs (Mr. Gullett), has removed one-fourth of those; threefourths remain. Then there is a 10 per cent, primage charge, and on top of all 25 per cent, exchange. The latter raises the price levels of both imports and’ exports; nevertheless its incidence is protective to the manufacturer, because although the cost of commodities has an effect upon wages, and exchange raised the cost of foodstuffs, wage levels in Australia to-day are below what they were before the exchange rate was increased. The cumulative effect of very high duties, plus the surcharges, primage, statutory addition of 10 per cent, to invoices, and exchange has been to raise the cost of most manufactured goods in Australia, far above the level of prices in other countries, and to put them out of harmony with the prices prevailing for primary products. The present index figure of price levels supplied by the Commonwealth Statistician is 11S for primary products, and 200 for manufactured goods. These figures cancel down to three and five. This means that the man who is selling primary products on a level of £3, and has to buy manufactured goods on a level of £5 can only purchase threefifths of the volume of goods he formerly bought. The restriction of purchasing power is one of the factors responsible for unemployment, which, I believe, will not be substantially relieved until the tariff is revised downwards, more drastically than this schedule proposes.

Many do not realize the extent to which some of the duties add to the cost of importation, and incidentally of goods manufactured locally to be sold in competition with them. If an item is subject to a duty of 40 per cent. - quite a moderate impost after our schooling in customs taxation during the regime of the Scullin Government - and a 50 per cent, surcharge, we find that goods having an f.o.b. value of £100 in Great Britain cost £220 wholesale in Australia after duty and primage have been paid and exchange has been added. That total is made up in this way -

Thus we have a wholesale, duty-paid landed cost, of £220 in respect of goods the f.o.b. value of which in London was £100. All hidden charges should be abolished. The continuance of the 10 per cent, statutory addition by the Customs Department to the invoice value when assessing duty is not justified. A duty of 20 per cent, or 50 per cent, imposed by this committee should be on the f.o.b. value, not on the f.o.b. values plus an amount added to cover the assumed cost of freight. The freight has to be paid in any case, and it is higher to Australia than to most other countries, because the lading is practically only one way, and also because of the great distance separating Australia from the principal manufacturing countries. The Government might well consider the advisability of amending the law to abolish the practice of adding 10 per cent, to the f.o.b. value before assessing the duty. Moreover in the assessment exchange should be taken into consideration. Last night the Minister for Trade and Customs (Mr. Gullett) said that a tariff schedule could not have regard to a fluctuating factor like exchange. He mentioned the difficulty that might arise if the duties under the general tariff were reduced by the amount of the adverse exchange, or part of the exchange, when that exchange with Japan was only 15 per cent., whereas with America, which is on the gold standard, it is more than 50 per cent. That difficulty could be easily overcome. To give effect to my proposal it is not necessary to alter the amount in the schedule. If the Customs Act were amended, the Customs officials, when assessing the amount of duty payable, could easily deduct from that duty an amount equal to, say, half of the then existing adverse exchange applicable on that’ day as between Australia and the country from which the goods were imported. I do not suggest that the manufacturer should be wholly deprived of the protection given by the exchange rate, but when it is as high as 25 per cent, and it is superimposed on the other duties and charges I have enumerated it should be taken into account. I had intended to move -

That the committee is of opinion that in assessing the amount of protective duty payable on importations, the protective duty chargeable shall be reduced by an amount equal to one-half of any adverse exchange applicable on that day between Australia and the country from which the goods have been imported.

I have been informed that this amendment would not be in order on the tariff schedule, but would be relevant to a bill to amend the Customs Act. Perhaps an opportunity to consider it in connexion with an amending bill will be presented later. In practice this proposal would operate in this way: if the duty were 40 per cent, and the exchange rate 25 per cent., the duty chargeable would be 27^ per cent. - that is 40 per cent, less one-half of 25 per cent.

Mr Hutchin:

– That would wipe out the British preference.

Mr PATERSON:

– It would only diminish the amount of the extra preference which Great Britain obtained due to the difference between the exchange rate on sterling and on gold, and would still leave the advantage with Great Britain of a greater preference than when exchange is at par. My proposal would reduce to some extent the prices charged for imported articles which inevitably affect the prices of locally manufactured articles ; too often the prices of the latter are based on the_ selling price of corresponding imports. I urge the- Government to consider the suggestion.

The Deputy Leader of the Opposition stressed the value of the protective policy to the primary industries. Whilst his contention might very well have been applied to such primary industries as find their whole market in Australia, and have no surplus for export, it does not apply to those great staple industries which have an exportable surplus, sometimes greater than the sales in Australia. For instance, nobody can reasonably suggest that a protective duty on raw wool would be of the slightest advantage to the grower. A duty is imposed on wheat, but it is inoperative. During the drought of 1914, the only time when the duty might have been of advantage to the grower, the Government of the day removed it. The price of lamb for a great portion of the year is the export parity, and no duty will alter that, because butchers buy in the market for local consumption on equal terms with those buying for export, and incurring all the expenses incidental to transporting the meat 12,000 miles. Take dried fruits, another great Australian industry, the exportable proportion of whose products is somewhere in the neighbourhood of 75 per cent, to 80 per cent. I think it was in 1919 that we produced 141,000,000 tons, of which we consumed 12,000,000 and exported 2,000,000 tons; but we have now reached the stage when we sometimes produce more than 70,000,000 and export 60,000,000 tons. The artificial price that can be obtained on the small proportion consumed in Australia is almost negligible. Even if we can, by means of protective duties, obtain an artificial price for that proportion of our products sold in Australia, the producer still has the worst of the bargain if he is to pay the artificial price for the whole of his purchases, and only obtains the artificial price on the proportion of his produce which he can dispose of on the Australian market.

The Deputy Leader of the Opposition (Mr. Forde) declared that Australian butter was so protected that our producers obtained 4d. per lb. more locally than is paid for it in Great Britain. A little later the honorable- member for Newcastle (Mr. Watkins) put the difference up to 6d. I wish to contradict both statements, and to confirm what I said by interjection yesterday - that the . extent to which our dairymen are assisted by the scheme that bears my name, is merely that they obtain for fresh butter in Australia wholesale prices that are approximately identical with those obtained for equally fresh butter in London. I sent a wire this morning to those engaged in the butter industry in Victoria, in order to confirm my interjection. The reply reads -

Danish butter, 104s. London.

That is sterling. Changed into Australian money, the amount is 130s. The wire continues -

Victorian choicest butter, Melbourne, 130s. 8d., which is as close as it very well can be. The reason why I selected Danish butter is that no fair comparison can be made with anything but butter just as fresh as our own when it is put on the .counters of metropolitan grocers. The consumer in our great capital cities gets his supplies of butter practically fresh out of the churn, while Australian butter sold in London is six weeks to two months old. Although refrigeration has reached a high standard of development, it cannot be denied that some of the finer flavour and aroma has left that butter when it is retailed in London, and that brings about a reduction in price. Danish butter beats ours by about Id. per lb. on the London market, simply because it is as fresh out of the churn as is our own butter marketed in Australia. I am dealing only with wholesale prices, because I realize that the overseas grocer is content with a smaller profit than ours, who sometimes want as much as 4d. per lb.

Mr Lane:

– If our retailers obtain as much as 2d. per lb. they are satisfied.

Mr PATERSON:

– I am glad to learn that.

Mr Hutchin:

– If the exchange and the Paterson scheme are taken into consideration, our industry is operating under the equivalent of a 25 per cent, duty.

Mr PATERSON:

– The honorable member must realize that exchange would apply whether the Paterson scheme operated or not We cannot take two different currencies and put them side by side. .If we are going to take the price of butter in London and in Australia, we must deal either with sterling or with Australian money. I submit that, if manufactured goods of almost any description could be sold in Australia at approximately the same price as in London, there would be very little complaint about the operation of the tariff.

Mr Lane:

– Does not the Australian public carry an impost of 2d. per lb. on butter under the Paterson scheme?

Mr PATERSON:

– The Australian public is simply carrying a sufficient amount under that scheme to relieve the producer of the cost .of transport overseas of a commodity which is not so transported, and the cost of deterioration on a commodity which has not deteriorated.

Mr Forde:

– At how much per lb. does it work out?

Mr PATERSON:

– Threepence.

Mr Lane:

– Is not the butter industry stable enough to carry it own weight?

Mr PATERSON:

– It is doing so. Some honorable members appear not to grasp the fact that, if we compare the exporting and the non-exporting industries, either on a protectionist or freetrade basis, the relative position is entirely different. Let us assume, for the sake of argument, that certain manufactured goods could come into this country on a freetrade basis. What is the position of the local industry that is competing against them? It obtains world’s prices plus cost of transport from, say, Great Britain. Let honorable members try to visualize a ladder, one rung in the centre of which is painted a different colour from the others to distinguish it, and to represent world’s prices for manufactured and for primary products. Let us contrast the difference between the position of the man who is producing primary products and that of the man who is manufacturing in Australia. The latter, if he is selling on even terms with an imported article admitted free of duty, obtains a price equal to the London figure, plus overseas freight. He is one rung of the ladder above par. The man who is producing primary products and exporting them can only obtain world’s prices less overseas transport charges’, while, in the case of perishable goods like fruit, and, to some extent, butter, a certain amount is lost because the commodities are not in the same fresh state in which they were when they left this country. That brings him two rungs below par. If he is on an absolutely freetrade basis with no marketing plan to assist him, it means that not only for that part exported, but for all of the commodity that he sells in Australia, he must be content to accept world’s prices, less cost of ocean transport, when the commodity is not actually sent overseas, and less something for deterioration, when the commodity has not deteriorated. The plan that’ bears my name removes those . two- disabilities, and enables the producer to obtain for his fresh butter a price approximately equivalent to that ruling in the world’s market.

Mr Scullin:

– Our butter producers at least have ‘ the Australian market to begin with. The position would be different if the manufacturers were given that advantage.

Mr PATERSON:

– I must confess that E was surprised and disappointed to find no reference in the schedule to galvanized iron, particularly when I recall the happenings during the last few weeks of the Scullin Government. It will be remembered that that Administration imposed on galvanized iron duties of £5 10s., British, and £7 10s., general, and then called for a report from the Tariff Board. The report recommended duties of £4 10s. and £6 10s., on the condition that galvanized iron should not’ be sold in Australia at more than £25 per ton gross list price, subject to trade discounts. The board stated that exchange, freight, and so forth, afforded sufficient protection to our industry without any duty, but it recognized that exchange might not remain as it was.. The Scullin Government gave Lysaght Limited £1 per ton more duty than was recommended by the Tariff Board, and made no price condition, with the result that on the very day when the subject was debated in this chamber, I was able to read a quotation from the Sydney Morning Herald, of that date, showing that the wholesale price of galvanized iron was £29 10s., £4 10s. in excess of the amount which the board said was a fair thing under Australian - conditions. The present Minister for Customs (Mr. Gullett) was at the table at the time, and opposed that very high duty. He scarified the Scullin Government, perhaps even less temperately than I endeavoured to do myself, and he proposed to move an amendment to bring the duty back to the amount recommended by the Tariff Board. The present Attorney-General (Mr.’ Latham) reminded the honorable -gentleman of an arrangement he had made with me some time previously, that I was to have precedence in moving such an amendment, and he was courteous enough to give way to me. I have since wished sometimes that I had allowed the honorable gentleman to move the amendment. He supported me strongly, as did every other member of the then United Australia party, with the exception of that redoubtable stalwart for high protection, t!he present Postmaster-General (Mr. Fenton). Yet we find this schedule being introduced without providing for any reduction in the duty on galvanized iron. We heard the Minister himself using the same argument as a reason for not reducing the duty as was used by the then Minister for Customs, the present Deputy Leader of the Opposition (Mr. Forde). He stated that the recommendations of the Tariff Board were based on an annual output by Lysaght Limited, of 60,000 tons, and that, as the firm was not now producing that quantity, the costs of producing were higher, and the company was entitled to a bit more protection. Is it reasonable that any firm should have artificial conditions made for it to enable it to return interest on capital even under present adverse conditions? How many of those engaged in business, or who are on the land, can make anything like interest on their capital? Three years ago, I sold pure-bred Border Leicester wool for 21f d. per lb. To-day I can get only 5d. per lb. for wool which is just as good, which is less than 25 per cent, of the price prevailing three years ago. That experience is general throughout wool-growing districts, and the price of our wool would be much lower still were it not that we are off the gold and the sterling standards. Much the same may be said for wheat- - growers, and all other sections of primary producers. Most of them are in a deplorable condition, as, indeed, are many engaged in business other than primary production. Is it reasonable, therefore, for us to use our powers in this Parliament to grant such favorable and generous conditions to any great monopoly, to enable it to carry on profitably when other people cannot make interest, or anything like interest, on their capital? It is not reasonable, and I am intensely disappointed that the Minister did not reduce the duty on galvanized iron in accordance with the recommendations of the Tariff Board.

Mr Watkins:

– I rise to a point of order. Is it permissible to engage in a general debate when a specific item of the schedule is before the House? Further, is it proper that an honorable member should be permitted to discuss the duty on galvanized iron when that matter is now before the Tariff Board for consideration ?

The CHAIRMAN (Mr Bell:

– It has always been the practice in this Parliament to allow a general discussion on the tariff on the motion for .the acceptance of the first item on the schedule. Regarding the second point raised by the honorable member, the Chairman has no knowledge of what may be under consideration by the Tariff Board. Therefore, the honorable member for Gippsland (Mr. Paterson) is in order.

Mr PATERSON:

– I desire to draw attention to the various prices at which galvanized iron is being sold in other parts of the world. In the United Kingdom, in April, 1932, the price was £13 10s. sterling. In New Zealand, on the same date, the price was £20 a ton ; in South Africa it was £15 5s. a ton - on ‘ a gold basis - while in Australia the price was £24 18s. 2d. a ton, after the usual trade discounts had been taken off. Thus the price in Australia was approximately £5 a ton higher than in New Zealand, or nearly the amount of the duty which has been, imposed.

If we consider the natural protection which is afforded to this industry in Australia, we find that in freight, primage duty and exchange, this protection amounts to £7 4s. 8d. a ton. The total protection, received by the industry five years ago, including the bounty, was £5 9s. 6d. a ton. The present protection, natural and artificial, amounts to £12 14s. Sd. a ton, compared with £5 9s. 6d. in 1927. That seems to me to be a strong argument in favour of adopting the Tariff Board’s report, rather than continuing the duties imposed by the Scullin Government.

There is another glaring omission from this tariff schedule, namely, fencing wire. Under the Bruce-Page tariff, there was no duty on British fencing wire, but there was a bounty on locally manufactured wire. This bounty was granted to enable the local industry to carry on, but it was required to sell its products at a price which could compete with British wire imported under freetrade conditions. The Scullin Government found that funds were running low, and that it could not longer afford to continue paying the bounty. One would have thought that, in the circumstances, it would have said to the manufacturers “ We cannot continue paying you the bounty, and we realize that the men to whom you sell your wire, the wool and wheat growers, cannot afford to spoon-feed your industry. Therefore you must stand on your own feet as the users of your commodity have to do “. Instead of doing that, however, the Government removed the bounty and substituted for it a duty of an equal amount. It said, in effect, “ the whole community can no longer afford to subsidize the industry, therefore, we shall compel one section of the community to find the subsidy, which ca n still less afford to spoon-feed you than can the whole community “.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr HUTCHIN:
Denison

.- Coming as I do from Tasmania, it is obvious that my sympathies are in favour of a progressive reduction in the tariff, because Tasmania depends chiefly on primary production, and i3 at a disadvantage in that she has to find her markets overseas. Transportation costs are a heavy item with her producers, and add to the cost of marketing. In the report of the Commonwealth Joint Committee on Public Accounts, which visited Tasmania in 1930 to report on its general position, the following passage occurred: -

The high protective tariff is an almost unmixed hurden to Tasmania, with very little compensa ti ng benefit.

Having stated my general attitude in regard to this subject, let me say that it is most interesting to witness the tariff tug-of-war, which is proceeding here between those who wish, in effect, to abolish the tariff, and those who would, if they could, retain the present duties, or even increase them. Tariff making is a difficult business. It is one which calls for expert knowledge, close inquiry, and careful thinking. It is not a thing at which one can have a rough shot. Since I have listened to the tariff debate in this chamber, I have come to the conclusion that the parliamentary method of approaching tariff problems is, in fact, to have a rough shot at them. I do not see how Parliament can obtain a comprehensive view of tariff matters in relation to our national economic situation. At a time like this, it is ever so much more important even than it used to be that proper care should be taken in framing tariffs. That view, I am sure, must be accepted by all those who have the welfare of their country at heart, and who are not one-eyed. The tariff is an instrument which should be used to promote the balanced development of our country, without which neither primary nor secondary producers can ultimately come to much good.

Primary production is the main source of our national income, but, in the process of nation-building, we must have secondary industries as well. We want sufficient, and not over-sufficient, secondary industries, and certainly we do not want secondary industries which, by reason of their multiplicity or inefficiency, will kill the goose which lays the golden egg; in other words, the primary industries. When politicians go on the hustings, they have to say something about the tariff, and they usually content themselves with general statements. I do not refer now to members of the Labour party, who do not generalize, but say very definitely and honestly that they believe in high tariffs, and will do their best to shut out imports. If I may say so without offence, they take a one-eyed view of the subject. They believe that by high protection they can secure many benefits for the country. They do not realize that trade must flow two ways, nor will they admit that people in other countries can make some things better ‘than we can make them here, or are likely to he able to make them. It is not to our advantage to set up in this country industries which have been described as exotic, just for the fun of making things indifferently well, when we can buy those things from other people who specialize in their production, people who are prepared to buy from us the things in which we specialize.

The right honorable member for Cowper (Dr. Earle Page) complained of the lack of stability in our tariff. If I understand him correctly, he wants a tariff to be made and to stay put. I remind him that, in times like these we cannot have a stable tariff, because nothing else is stable. While conditions are changing rapidly, as they are now, we must have a certain amount of flexibility in our tariff. The right honorable member mentioned certain test’s by which we should judge what a tariff ought to be. He was quoting, I think, .from the London Times. I understood him to say that, first of all, the price at’ which an industry could produce goods must be competitive. That is, the Australian price for a pair of boots or a sewing machine should be the same as the price at which the British manufacturers of similar articles could sell their goods in Australia. Further, there must be a sufficiency of supply to accommodate the home market. I have no quarrel with that. He went on to say that there must be a potential capacity, at any rate, to develop an export market.

As to selling at a competitive price, the right honorable member must surely realize on second thoughts that conditions in this country - geographical and marketing conditions - are such that our secondary industries can hardly be expected to produce on a strictly competitive basis, due to the smaller turnover He went on to say that, in order to arrange for measures of protection and to safeguard them, there should first of all be an impartial inquiry. That is the method of both the Tariff Board and the Tariff Commission in England. He then said that there should be a biennial report on the comparative efficiency of industries. From my knowledge of industry, I say that that is an impracticable suggestion. Not even the greatest brains in the world can investigate widely different industries and gather useful information about their comparative efficiency. That is what I describe as a political pious hope. He then said that the Tariff Commission would watch the prices in the home and export markets, and if they increased beyond the level which was considered fair, the question of continuing protection would have to be considered. He also stated that if industries failed to grow to the extent anticipated, the Tariff Commission would query the advisability of extending protection for a further period. There has been a lot of talk in this country lately about the desirability of having a scientific tariff. I do not know, nor docs, I think, any other honorable member, what is a scientific tariff. There are notmany scientists in this chamber. It would not be reasonable to expect honorable members to evolve a scientific tariff, even if such a thing were possible. As the Leader of the Country party (Dr. Earle Page) is probably the most scientific person in this Parliament, I should like to ask him whether -he proposes to approach this tariff problem as a doctor would approach a sick person if he came with bag and knife in hand, intent on carving his patient into bits? Is that the proposal of the party which be represents? If so, I would remind honorable members that that method is quite different from that used in framing the Pratten tariff, which was introduced by a government of which the right honorable member for Cowper was joint leader. There was no mention in the right honorable gentleman’s speech of primary industries, except his references to the grievances, disabilities, and burdens of those industries. He gave us to understand, in effect, that the manufacturing industries obtained all the fat and the primary industries all the lean. He said that the primary industries were sick unto death. He talked about the efficiency of production, and stated blandly that many secondary industries were inefficient. I agree that that is so. But, by inference, we learnt from him that all the primary industries are efficient. We certainly cannot agree with that. The primary industries have a certain measure of protection. In addition they have had, and still have, substantial assistance from the community at large, of which no word was said by the Leader of the Country party. The Government has from time to time, either through rail freights or relief measures, rendered substantial help to the primary industries, and it would have helped the case for the Country party had that been .mentioned by the right honorable gentleman. We may at once acknowledge that inefficiency is not the peculiar possession of the secondary industries; that it appears in the primary industries as well. Some primary industries, and also some secondary industries, could certainly be placed under much better business management. I failed to gather from the speech of the Leader of the Country party to what extent the tariff should be reduced. While the honorable member for Riverina (Mr. Nock) was making his interesting and thoughtful speech, I asked him to what extent the tariff should bc reduced, but received no reply. I do not think that any honorable member is qualified to state what percentage of reduction in the tariff would meet the situation of to-day. When Australia took ill, as a result of the depression, the then Government, after much hesitancy, called in experts and asked for their advice. Those experts evolved a plan which included reduction of wages. That was a distasteful remedy. Then they suggested that all adjustable government expenditure should be reduced, and later on that the exchange rate should be increased. They then suggested that the tariff should be reviewed in a downward direction in order to compel secondary industries to reduce the cost of production. Their recommendations as to reduced tariffs, however, were couched in general terms. If it is fitting that experts should be called in to recommend a reduction in wages, interest, and adjustable governmental expenditure, if those gentlemen have the proper and complete picture of Australian economy in their minds, if they are judges of cause and effect, surely they should be able to indicate to the Government of the day what, in their view, is a fair average reduction in tariff rates to be tried at least as an experimental measure. If the Government received advice that the tariff should be reduced, say 10 per cent., 15 per cent., or 22i per cent., it should then turn to the Tariff Board, which is an efficient body continually inquiring into and closely in touch with the whole of the industries of Australia, and say to it - “ We are going to give this recommendation of the experts a trial to ascertain whether it will have any effect in reduc ing the cost of production and increasing employment, and we require you, as the expert body, to go into the matter in detail and submit a scheme to us.” If that procedure were followed, and such a scheme were brought before Parliament, then each of us would be able to obtain a comprehensive view of the tariff, which would enable us to give proper consideration to it. Our present methods show that our politics are of the parish pump variety. We advocate the thing which is near and dear to our hearts, and to our electorates. As individual members we are concerned not with the welfare of Australia as a whole, but with the product - whether it be sugar, butter, tobacco, or something else - which is produced in our own electorates. One would think from the speeches of the members of the Country party that the last election had been fought on the tariff issue; but that was not so. The United Australia party went to the people on the vital issue of sound finance. I admit that the policy speech of the Prime Minister dealt with tariff principles, but it is useless for the members of the Country party to contend that the tariff agreement between the Leader of the Country party and the Leader of the United Australia party, was of paramount importance at the recent election. The argument of the right honorable member for Cowper failed to convince me, and, I think, most honorable members. That agreement is the guarantee to the people that those who sit behind the Government will, as it were, hold the centre of the rope in the tariff tug-of-war and see that no cribbing or unfair tactics take place. Disappointment has been expressed that a more comprehensive tariff proposal has not already been put before this chamber. I have said that the Government was returned to power on the issue of sound finance. No sooner did it obtain office than it took action to ensure the financial recovery of Australia, and it was only last Friday that its first main object was achieved. Now we are having a discussion on the tariff. In view of the important discussions which will take place at the Ottawa conference, the broad objects of which are known to every honorable member, it is not desirable, even if it were possible, that there should now ‘be any undue tinkering with the tariff. The Government Ls acting rightly. It is sending to Ottawa Ministers and officials of knowledge and capacity, and they should be given as free a hand as possible to act on behalf of Australia, and to bring home the fruits of their labours for our consideration and approval. I am confident that they will bring us something worth while. If we tinker meanwhile with the tariff we shall merely rob our representatives at Ottawa of some useful counters for bargaining. We could bring about a certain measure of tariff reform by allowing a greater freedom in respect of the importation of heavy and specialized machinery. I am confident that in the near future the newsprint industry will be established in Tasmania. The first unit of that industry, which will employ some 500 or 600 men, will call for machinery costing about £500,000. That i.° specialized machinery, over and above machinery that oan be manufactured in Australia, and will be bought in this country. If that specialized machinery cannot be brought into this country free of duty, the initial capitalization of the industry will be exceedingly heavy, and will be reflected in the costs of production. The industry has announced that it requires neither duty nor bounty. That information is so refreshing as to lead one to hope that the Government will meet the request of the industry to assist it iri* obtaining the specialized machinery that it requires. As an instance of what happens under present conditions, I cite the experience of a firm with which I am connected, which bought a heavy electrical crane in Glasgow for £5,000. It stands to-day in the books of the company at £16,500. The difference is not all represented . by tariff; it also includes freight, and erection charges, but the greatest of these three is the tariff. In connexion with the hydro-electrical schemes in Tasmania, and the Yallourn brown coal undertaking in Victoria, it was necessary to import highly specialized machinery of a kind not made in the Commonwealth. The Government of the day’ treated very cavalierly the applications made to it for exemption from duty. It is essential that machinery of this kind shall be admitted into Australia either free or under a merely nominal duty, because it is a basic requirement of industries which will father other industries. Such basic industries should be established under the best possible conditions. Involved subjects such as that which I am now discussing will undoubtedly be considered at the Ottawa Conference, and I trust that something will be done at that gathering to ensure that requirements which we cannot make efficiently here will be admitted under reasonable conditions. I know it is not the desire of the British manufacturers to compete unfairly against our industries; but it is reasonable for them to expect that heavy specialized and complicated machinery which they manufacture, and which we do not, and which is necessary for the establishment of new industries here, will be admitted -into Australia under reasonable conditions. I am glad that Australia will be represented at the Ottawa Conference by the Assistant Treasurer (Mr. Bruce) and the Minister for Trade and Customs (Mr. Gullett). These honorable gentlemen are thoroughly capable of placing the Australian view before the conference, and we know also that they appreciate the Empire view. I trust that they will be able to bring back from that conference something that will be of great advantage to Australia.

Mr HOLMAN:
Martin

.- The honorable member for Denison (Mr. Hutchin) has so admirably covered some of the ground which I intended to traverse that I do not propose to touch t» any extent upon the points with which he dealt. As a new member of this House, whose personal acquaintance with tariff struggles began at the last federal election, I propose to offer some observations with the object of explaining the views of honorable members of this House whose minds are unpolluted by previous tariff debates. I have listened with interest, as I am sure have other honorable members, to the contributions to this debate made by the honorable gentlemen who spoke in the interests of the Country party. Before proceeding to criticize the remarks that they have made, I confess that I am firmly convinced that the resuscitation of Australia depends upon the recovery of her export industries, which are represented to the extent of at least 90 per cent. by her primary industries. I, and I am sure other honorable members, are most anxious to hear from those who have come to this House professing to express the views of those of our citizens who are engaged in exporting industries, any suggestions that they may have to make to give practical assistance to these industries.

The Country party is not in a majority in this chamber, but there is a sufficient number of other honorable members who would join it to make a majority to give effect to any sound and practical proposal which they may advance for assisting our exporting industries. What proposals of this kind have we gathered from the various spokesmen of the Country party during this debate? I am not speaking in the slightest degree in terms of personal criticism when I say that so far we have no idea what tariff items they think should be reduced, nor have they shown us clearly where the shoe pinches. I speak as one not bound by the shibboleths of any party, who has a free hand to do as he pleases in regard to tariff matters. I, and other honorable members of this party, are here to do the best we can for Australia, but we do not think it our duty to run the risk of destroying certain industries which are at least carrying on, in order to give some purely problematical help to some other industries. Yesterday I put specific questions to two or three members of the Country party who addressed the committee, and this afternoon the honorable member for Denison has also made certain definite inquiries, but neither of us could get a satisfactory answer.

Mr Thompson:

– What does the honorable gentleman wish to know?

Mr HOLMAN:

– Hope springs eternal in the breast of the United Australia party, that is, in my breast, so that I do not yet despair of enlightenment. The honorable member for Forrest (Mr. Prowse) quoted extracts from certain speeches reported in Hansard. I shall refer to these quotations a little later. Perhaps then the honorable member for New England (Mr. Thompson) may learn what is bothering me, and provide me with the answers that I am seeking.

I have no desire to champion the Government - the members of the Ministry are thoroughly capable of championing their own cause - but as one who was a candidate at the last election in the interests of the United Australia party, I shall make some comment upon the remarks of the right honorable member for Cowper (Dr. Earle Page), who spoke as if the members of the Government, and, to a lesser degree, the members of the United Australia party generally, were’ pledged in some special way to the advancement of the interests of the primary producers, no matter at what expense to those engaged in secondary industries. He suggested that we were bound, not merely by the obligations entered into through our conformity with the policy speech of the Prime Minister (Mr. Lyons), but also by obligations entered into earlier by some agreement or other. I understood the right honorable gentleman to say that, to some extent, we had departed from the course set out in that agreement when the Prime Minister delivered his policy speech.

Dr Earle Page:

– No.

Mr HOLMAN:

– Well, whether the agreement was departed from when the policy speech was delivered, or before or after that time, we may take it that it has now been departed from. In fact, the right honorable gentleman argued that the agreement had been entirely abandoned. He referred to the terms of the agreement last night, and I shall direct the attention of honorable members to the words which he used. Paragraph 2, according to the right honorable member, read as follows: -

To create employment and lower the cost of living, it is agreed that there must be a reduction in the cost of production and distribution in both primary and secondary industries.

Honorable members will see that the primary and secondary industries are put in the same category and on the same footing. It is further provided that -

This can largely be achieved by a revision of the industrial situation and a revision of the tariff, which must be carried out equitably.

We see, therefore, that, according to the agreement, equal consideration is to be given to the industrialists who are engaged in either primary or secondary industries. There is also a provision for-

The scientific revision of the tariff for the economic rehabilitation of Australia, with a view to -

the encouragement and protection of efficient primary and second industries ;

the expansion of the export of primary and secondary products-

Primary and secondary industries are, as honorable members will see, linked together -

  1. encouragement of Empire trade; and
  2. negotiations of reciprocal trade treaties with other nations.

It will be apparent to honorable members, therefore, that our primary and secondary industries were to be given equal consideration, pari pasu, without preference for the one or the sacrifice of the other. I confess that I had forgotten the existence of such an agreement; but, as a candidate of the United Australia party, [ have honoured the principles on which it is based, and, so far as I know, they were honoured by all the United Australia party candidates throughout the vicissitudes of the election campaign, and have been adhered to since then. I have never departed in the slightest degree from that policy, nor has the Prime Minister or his colleagues; and not any of us has a desire to do so. It is our wish to deal equitably with both the primary and the secondary industries. But, as a body of practical men, we have to face the existing facts. We are not starting out, like Robinson Crusoe, on a desert island, with everything to be commenced, and free to do the best that our intelligence and energy will permit us to do; we are citizens of a large nation, which has already made enormous investments of capital and has large numbers of workmen engaged in certain industries. It is our duty to see that we do nothing here which will bring ruin to those investments or misery to their workers. We have to recognize that there are certain vested interests in existing industries, and we should do our best to maintain them. I make these remarks, not as a defender of the Ministry, but as one who came into this House innocent, unspotted from the world on tariff matters, and quite unprepared to face the wiles of the right honorable member for Cowper. We do not feel ourselves bound to adhere to the terms of an imaginary agreement for the observance of a certain line of policy, of the existence of which, until the right honorable member delivered his speech, we were quite ignorant.

Mr Scullin:

– Would the honorable member say that the words which he has read from the agreement could be interpreted to mean anything?

Mr HOLMAN:

– I would say that, in certain respects, the document is an ideal political agreement. I remember reading many years ago that the late Artemus Ward claimed for himself that he was a man with a well-balanced mind. He said that his mind was well-balanced because it balanced either way. The terms of the agreement which I have quoted are so well balanced that they could go a good many ways before being brought ultimately to a definite statement.

The honorable member for Forrest (Mr. Prowse) referred to certain figures reported in Hansard, in which a comparison was made between costs in 191.3 and 1930.

Sitting suspended from 6.15 to8 p.m.

Mr HOLMAN:

– At the dinner adjournment I was engaged in discussing the attitude of certain honorable members who, in the course of this debate, had put this view to the committee: that the difficult position of our rural industries is due largely to injudicious increases of the tariff rates on certain secondary industries.

Mr Prowse:

– On all costs of living - railway freights, stockings, hats, and everything.

Mr HOLMAN:

– I am glad to be supported in the interpretation which I have put upon the attitude of honorable members of the Country party. It is an attitude which I personally deplore, because I feel that it has little or no support from the figures which have been supplied by them. After all, science is measurement, and, unless we can talk of these matters quantitively, it is not of much use to discuss them at all. I submit that it is of no avail to tell the committee that the rate of a certain customs duty has increased so much per cent. - 50, 100, or 300 - unless we know what sum of money is annually expended upon the commodity which is the subject of this alteration

One honorable member assured us that the common flatiron, which costs 2s. 6d. in America, is now subject to a duty of 7s. 6d., or 300 per cent, on its value. If that is so, it indicates a very distressing state of affairs for those who are in the habit of buying flatirons every day. Still, I do not know why the primary producers should find it necessary to purchase this article continuously, or why the import duty on flatirons should be regarded as a special blow aimed at the success of our primary industries. I suppose that most families commence life with a supply of flatirons which lasts them half-way through, and, therefore, the duty on this commodity should be of little consequence to them. Similarly, with regard to galvanized iron, the Deputy Leader of the Country party (Mr. Paterson) devoted ranch of his time to tracing out the actual cost of galvanized iron as the result of the tariff. He showed that there was a difference of £5 10s. per ton between the price paid by the farmer and the price he would have to pay if this commodity were not manufactured in Australia, and he were allowed to obtain imported iron free of duty, and subject only to such costs as freight, exchange, and insurance. But how many tons does the farmer buy per annum, taking one year with another?

Mr McBride:

– The tariff has put up the cost of living generally.

Mr HOLMAN:

– Of course it has. If a man puts up a building which involves the purchase of, say, 10 tons of galvanized iron, his actual costs are increased by the tariff by £50; but I submit that charges of that kind are in no way responsible for the present depressed condition of our agricultural industries. The sums are trifling; they are not fundamental. It is of no use for one honorable member after another to tell us that what is ruining the important section of the producers for whom they undertake to speak, and whom they claim specially to represent, is the high tariff. If an increased duty means an extra charge of £5 per ton on a certain commodity which is rarely used-

Mr Paterson:

– The tariff increases the cost of all commodities. We have to consider its cumulative effect.

Mr HOLMAN:

– I shall come to that aspect of the matter. . If a commodity is used only once or twice during a farmer’s career for the roofing of a building which serves him for years, without it being necessary to renew the roof, how can the trifling extra cost due to the tariff make all the difference between ruin and success in his agricultural operations?

With the indulgence of the committee, 1 shall deal in detail with the figures to which the honorable member for Forrest (Mr. Prowse) referred, and to which he directed my individual attention. He dealt first with the cost of erecting 10 miles of fencing round a typical 1,000- acre farm, and said that the price of the fencing material had increased in seventeen years, that is, between 1913 and 1930, by £111. At the outset, I ask honorable members to consider how much of this increase is properly attributable to the tariff. No doubt, fencing wire has been subjected to some increase in customs taxation, but what duty is collected on the post holes that have to be dug before a fence can be erected?

Mr Nairn:

– There are the workmen’s wages to be paid.

Mr HOLMAN:

– That, I take it, is a different cause of complaint. Fencing is largely a matter of splitting posts and rails. Duty is collected on cross-cut saws, but I ask some honorable member to tell us what it costs per annum in the way of additional expense in running a farm ii the fencing of a 1,000-acre block costs £111 more to-day than it did seventeen years ago.

Mr Thompson:

– To-day the farmer’s income is only half what it was.

Mr HOLMAN:

– The tariff cannot increase his income. Honorable members say that the tariff has added so much to his expenses, that it has ruined him. His income is an entirely different matter. The tariff cannot help the exporter, and it is the tariff that we are now discussing. I ask that some honorable member who knows should tell us how much of the £111 by which the farmer’s capital expenditure has been increased in the course of seventeen years, is spent on labour for digging po3t holes, and how much represents actual increase in the cost of materials.

Water conservation was the. next item mentioned by the honorable member for Forrest, and the cost of that wa3 said to have included an additional charge, due to the tariff, of £150, while windmills, tanks, &c., involved an increased expenditure of £41. Water conservation means excavating dams, either by men using pick and shovel, or with horse scoops. How much does the tariff affect the cost of that operation? No doubt there would be some small increase in capital cost in the provision of windmills. The total increase in the cost of clearing 900 acres was given as £450, which makes up a very substantial proportion of the total increase of £1,408, but how is that increase related to the tariff?

Mr Prowse:

– The honorable member apparently does not realize the effect of the vicious circle.

Mr HOLMAN:

– My associations have hitherto been comparatively virtuous, and I am not familiar with an argument, which indeed follows a vicious circle when ii leads to the conclusion that the extra cost of clearing land is due to the tariff. The additional cost of erecting buildings was said to be £330. A portion of that amount, but certainly not all of it, may be attributed to the tariff. The actual increase alleged by the honorable member in the cost of machinery was £165, that is from £326 in . 1913 to £491 in 1930. That increase may be said to have been due to the tariff; I. am certainly not in a petition to deny or refute that, fact. For the purpose of my present argument, I am prepared to believe that the whole of the increased expenditure of £1,400 can be fairly attributed to the operation of the tariff, although the honorable member for Forrest showed that the increase was partly due to other causes.

Mr Paterson:

– It means 30s. per week in interest.

Mr HOLMAN:

– It means an increase in actual expenditure upon a farm of 1,000 acres of1s. 7½d. per acre per annum. AlthoughI am not a farmer,I represented in the Parliament of New South Wales for 22 years the leading wheat-growing area in Australia. I think that in my time, I have represented more wheat-growers than most of the present honorable members of the Country party, and I have yet to find the farmer who would consider that a’ loss of1s. 7½d. per acre per annum would make the difference between success and rain.

Mr Blacklow:

– What return is being obtained to-day by wool-growers?

Mr HOLMAN:

– I am dealing with a farm of 1,000 acres, of which 900 acres are cleared - not a sheep run. Some trifling relief could, perhaps, be given by a lowering of the tariff. In this case, assuming that all the increases included in the figures submitted by the honorable member for Forrest can be fairly attributed to the tariff, relief to the extent of1s. 7½d. per acre per annum could be afforded if the duties were abolished, and if they were reduced by 50 per cent., about 9½d. per acre per annum could be saved. If by judicious amendments of the tariff schedule relief to the extent of1s. 7½d. per acre per annum could be given, I would be quite favorable to that being done; but I repudiate the suggestion that the depressed condition of rural industries throughout Australia to-day is due to a tax of1s. 7½d. per acre per annum more than was imposed seventeen years ago.

Mr Stacey:

– Has the honorable gentleman taken into account the initial costs of a man going upon the land ?

Mr HOLMAN:

– These are described by the honorable member for Forrest (Mr. Prowse) as the initial costs of establishing a reasonably equipped farm of 1,000 acres. They are not recurring costs; the only recurring cost is the interest, which amounts to1s.7½d. per acre per annum.

Mr Gregory:

– What nonsense! Machinery does not last for more than four or five years.

Mr HOLMAN:

– My figures are subject to whatever allowance for depreciation may be necessary. I propose to quote some statistics which at all events have the advantage of being more recent than those quoted by the honorable member. The triennial conference of producers and consumers was held at Bathurst in May last, and a committee of practical farmers was appointed to prepare an estimate based on their practical knowledge, of the cost per bushel of producing wheat. The committee reached an estimate of 4s. 0½d. per bushel, and according to a. report published in the Sydney Morning Herald on the 18th May, 1931, working stock and plant were computed to cost £750. Allowing 7 per cent. for interest, and10 per cent. for depreciation, we get a total annual cost of £127 10s. for stock and plant. Assuming that the whole of that cost was due to the tariff, the typical Bathurst farmer would save £127 10s. per annum if he obtained his stock and machinery for nothing.

Mr Nairn:

– That is equivalent to £2 10s. a week, which very few farmers are earning now.

Mr HOLMAN:

– According to the committee of the Bathurst conference the farmers are losing that amount. The typical farm was estimated to yield 4,320 bushels. If the whole cost of machinery could be evaded, and the annual cost properly attributable to interest and depreciation could be saved, the actual economy would be 7d. a bushel. But to assume that the whole of the cost of the machinery isattributable to the tariff is to ridiculously overstate the case. Probably not one-third of it could be so attributed by even the most strenuous supporter of the view which I am combating. The Bathurst committee declared last year that the wheat-farmer was losing approximately1s. a bushel, but, of course, prices have advanced since then. No tariff alteration which has been suggested so far could save anything like 7d. a bushel. because that would involve the elimination of the total cost of the machinery on the farm. The utmost that could be eliminated would be about one-fourth, and that would represent a saving of1¾d. a bushel. I ask those honorable gentlemen who dispute the general fairness of that reasoning to point to the items of the tariff which, if reduced, would yield to the farmer a larger gain than I have mentioned. If we were to adopt the course which the Deputy Leader of the Country party seemed to advocate, and close down the galvanized iron industry, about £5 10s. per ton of galvanized iron used would be saved. But the committee is entitled to know how many tons are used by the rural producers in the course of a year, and what would be the total saving to them if this commodity were introduced free of duty. No honorable member seems to have made that computation. No doubt such a policy would save something to the primary producer, but generally these computations of costs are made in percentages, on the principle that is applied to the flatiron; we are told that but for the tariff a flatiron would cost only 2s. 6d., but as the selling price is 10s. the tariff has been responsible for an increase of 300 per cent.! I urge honorable members of the Country party to be more quantitative on this aspect of the tariff, and to let us know precisely what benefit would be conferred upon the rural industries by a definite change of policy. We could then balance the benefits against the losses. I am prepared to ruin certain secondary industries if I am satisfied that that course will really give benefit and compensation to the agricultural industry, and cause a net gain to the community generally. But we have no proof of that. Honorable members of the Country party content themselves with quoting rows of horrifying figures showing the frightful totals to-day in comparison with the less-alarming totals of a few years ago.

Mr Prowse:

– What did the British Economic Commission say about the tariff?

Mr HOLMAN:

– I do not know. I am concerned only with what the honorable member and his colleagues have been saying during this debate, and, after all, we are the people who have to decide this issue by our votes. When honorable members make a definite claim they should be prepared to substantiate it with clear figures, showing the total benefits that would accrue to the rural industries if their claim were granted. When that proof is forthcoming, I shall be ready to act upon it ; but I am not ready to act on the figures that have been given to-day.

Mr Fenton:

– Inquiries disclose that the New Zealand farmer pays more for machinery imported free of duty than the Australian farmer pays for the product of the protected local industry.

Mr HOLMAN:

– I leave that contention to more experienced students of the tariff than I claim to be. Fortunately, I had.no need to study the tariff until a few months ago, but I am now endeavouring to convey to the committee the impression made upon the mind of a newcomer to this Parliament by the argument with which we have been favoured by members of the Country party. That argument carries no conviction to me.

Mr Gregory:

– Why not attempt to justify the imposition of these high duties ?

Mr HOLMAN:

– The justification of ihe duties is provided by the industries which they protect, and which are entitled to consideration. If these are being supported and protected at an improper cost to agriculture, by all means clip their wings. But the case for agriculture should be established, not by mere vague generalizations, but by definite figures showing the total cost in pounds, shillings, and pence imposed upon the farmer by the tariff.

The committee will be asked to vote upon the proposals submitted by the Government in regard to the tobacco industry, and as I do not propose to speak on that subject when it arises, I shall briefly define my attitude to it now. The committee fully understands from the clear explanation of the Minister for Trade and Customs that the proposal which the Government had submitted is primarily financial. Revenue is lacking, and the duties on tobacco which have been proposed will increase the income of the Treasury from that source, while at the same time leaving to the grower a protection of 300 per cent. - a figure which would be repudiated with horror by certain honorable members if applied to any secondary industries, but which they coolly tell us is quite inadequate for this specially favoured primary industry. I have no hostility to any industry; I am prepared to vote for any protective duty which the industry concerned can prove to be necessary, but 300 per cent, should be sufficient for any producer, primary or secondary. Very few of those secondary industries whose protection we are asked to reduce in the interests of agriculture enjoy duties of anything like 300 per cent. ; they get along with duties of 50 per cent., 70 per cent., and, in a few instances, 100 per cent.

Mr Abbott:

– And prohibition.

Mr HOLMAN:

– Prohibition is a different matter.’ The Australian tariff is protective, and such prohibitions as have been imposed are due, Ave have just been told by the Leader of the Opposition, to necessities arising out of the adverse balance of trade. Why should the Government forgo a definite revenue in order to raise the protection of one favoured industry from 300 per cent., as is now proposed, to 500 per cent., which the honorable gentleman who urged this advance would not dream of bestowing upon any secondary industry? On a matter of this kind honorable members must follow the lead of the Government. There is, J understand, real risk of a shortage in Commonwealth funds at the end of the present financial year. Australia lias been passing through a critical period. One of the objectives of this House must be the restoration of industry, but in the emergent circumstances, in which we find, ourselves, the restoration of decent finance is our most urgent duty, first certainly in time, and first probably in importance. Honorable members should not throw obstacles in the path of the Ministry when the most sympathetic consideration is being shown to the tobacco-growers for whose special benefit particularly heavy duties have been imposed. The only reason for the reduction of the exceedingly high rates operating during the lastwo years is the necessity for looking to the interests of the exchequer as well as those of the individual growers. For these reasons I shall vote for the Government’s proposals.

Mr Thompson:

– I expected that.

Mr HOLMAN:

– And I, knowing the patriotism and intelligence of the honorable member for New England (Mr. Thompson), expect him to vote with me. It. would be regrettable if two intelligent and, patriotic members, as he and I are, should, on this occasion, be found on opposite sides. I appeal to him and to those who think as he does to accept the lead of the Government and its assurance that additional revenue is necessary if we are to make satisfactory progress towards the restoration of the national finances.

Mr PROWSE:

– The Government leads in different directions at different times.

Mr HOLMAN:

– Every good government has to do that. Consistency is the bugbear of the small mind, and the man who has just been recovered from a watery grave and is in a state of suspended animation, requires different treatment for his restoration from that needed to reclaim a relapsed drunkard. We have in the course of our lives to face different crises, and each crisis has to be met in accordance with the needs of the moment. This Government has met the financial difficulties that confront the nation by the adoption of appropriate methods, and honorable members must not complain of that. I shall not only vote for the tobacco proposals of the Government, but I shall support its tariff proposals generally.

Mr THOMPSON:
New England

– A great load of anxiety will be lifted from the minds of the producers of Australia by the speech just delivered by the honorable member for Martin (Mr. Holman). It comes as a surprise to honorable members of the Country party, to learn that they have been suffering from delusions. I feel that the pastoralists and other primary producers, who have debated the subject of the tariff so exhaustively, will also be surprised to find that they, too, are suffering from a delusion. The honorable member told us that, after all, the impositions of which we have complained do not matter, and he worked them out in terms of so many pence per acre. The honorable member for Forrest (Mr. Prowse) calculated that, on a 1,000 acre farm, the extra costs imposed by the tariff during the years 1913 to 1930, aggregated ?1,400. The honorable member for Martin, with his mathematical mind, reckoned that out at 1s. 7d. per acre per annum in interest, or an extra ?80 a year. This is a serious thing to the farmer at a time when he is receiving for his wheat the lowest price obtained for 30 years.

Mr Archdale Parkhill:

– Is the honorable member a farmer?

The CHAIRMAN (Mr Bell:

– Order !

Mr THOMPSON:

– I am as good a farmer as the honorable member for Warringah (Mr. Parkhill), and I know a good deal more about the primary producers than he does. I do not think he has ever been near a farmer.

Mr Archdale Parkhill:

– I have travelled over more of the State, and I have been in touch with a greater number of farmers than the honorable member.

The CHAIRMAN:

– Order !

Mr THOMPSON:

– The honorable gentleman has gained the only knowledge that he possesses about farmers during his travels to and from Sydney, or when attending electoral conferences.

Mr. Archdale Parkhill again interjecting,

The CHAIRMAN:

-Order ! I have already called the Minister for the Interior to order twice. He must not flout the Chair.

Mr THOMPSON:

– If all things were to be decided on the basis propounded by the honorable member for Martin, nothing would matter. The tragic point is that the farmer earns less to-day than he has since federation.

Mr White:

– Everybody else is in the same position.

Mr THOMPSON:

– Honorable members behind the Government were much more sympathetic to farmers during the elections than they now are. When we have a chance to debate these matters calmly and dispassionately we are subjected to cheap jibes and sneers, and the matter is treated as a joke..

The CHAIRMAN:

– Order! The honorable member for New England (Mr. Thompson) must expect to be interrupted if he makes provocative remarks.

Mr Lane:

– I rise to a point of order. I regard the allegation that Government members are indulging in cheap jibes and sneers as offensive, and ask that it be withdrawn.

The CHAIRMAN:

– I have already called the honorable member for New England to order. His reference was to a party and not to an individual, and I do not consider the honorable member for Barton (Mr. Lane) has any grounds for taking personal offence.

Mr THOMPSON:

– If we can brush aside the fact that, as a result of the tariff, a farmer with a 1,000-acre holding has to pay an additional ?80 a year, we can brush aside any factor that increases the cost of living, and claim that it amounts to nothing. The world drop in prices has had a disastrous effect on the farming community, which can ill afford to bear any additional impost. The honorable member for Martin might be sound in his contention, if primary producers were placed similarly to those engaged in secondary industries, or even those engaged in distribution or in professional activities. But the farmer has no opportunity to pass on the extra burden. He is at the mercy of the world’s prices. One day he receives 4s. a bushel for his wheat; the next but ls. 3d. In the circumstances the argument advanced by the honorable member for Martin is worthless, and makes a farce of the discussion on tariffs. The honorable member has not realized that the farmer is hit in many indirect ways. He has to pay much heavier shire rates because of the substantial tax placed on the machinery used on country roads. The honorable member for Riverina (Mr. Nock) last night quoted a list of prices showing the tremendous increase in the price of essential tools of trade used by the farming and pastoral community. In some cases they are 100 per cent, higher than in other countries which compete with the primary products of Australia. What chance have our farmers of succeeding against such competition.

The honorable member for Martin poohpoohed the matter of income. That is not altogether unexpected from a leading city barrister, but a farmer does not have wallets of guineas coming in for a few day’s work. He has to be satisfied with two or three pounds a week as compensation for his labour and interest on his capital. In fact, the majority of farmers now receive no income. All they have are debts.

Surely at a time like this, and when there is no immediate prospect of conditions improving, we should not decide as a matter of national policy to increase the tariff burden, which already rests so heavily on the backs of our farmers and pastoralists. Many honorable members who support the Government roundly condemned the high tariff proposals of the Scullin Government, and the honorable member for Warringah (Mr. Parkbill) was the noisiest denunciator of the schedules. I have examined some of his speeches in Hansard; but I would not have the hardihood to read them to the committee; they would so shock honorable members when contrasted with his present attitude. He cursed everything that the Scullin Government did to make the cost of living higher in Australia. After hearing him, I would have staked my reputation that, if the party he supported ever assumed office, he would not support it for five minutes were it to propose to perpetuate the tariff policy of the Scullin Administration. The Minister for Trade and Customs (Mr. Gullett) is in the same category, and came a close second to the honorable member for Warringah in his vehement denunciation of high tariffs. Most of the propaganda that other honorable membei’3 used against the Scullin tariff was obtained from those two honorable members, who were regarded as the real advocates of tariff reform in Australia. The Lyons Government has now been in office for nearly six months, and has had an opportunity to do something in regard to the tariff. I do not propose to say much about the agreement which the honorable member for Martin (Mr. Holman) derided, because it does not appear to me to have been an agreement at all. It seems to have been more or less a joke. We, in our Arcadian innocence, trusted the members of the United Australia party. The Minister for Trade and Customs (Mr. Gullett) has had an opportunity of showing the faith that is in him. We believed that the portfolio of Customs would be quite safe in hi3 hands. Naturally, we were disappointed that our leader did not get that portfolio. If he had got it, our tariff policy would have been more expeditiously and scientifically effectuated; but we believed that the honorable member for Henty “would do the job pretty well in the circumstances. We find, however, that out of 400 items the amended tariff schedule alters the duty merely on 79. There is an increase of rates on eleven items, and reductions have been made in respect of 68. Among the industries affected by reductions, the Minister has picked out one poor, forlorn primary industry, tobacco growing, and by a reduction in the duty of 40 per cent, has crippled it. Compare his treatment of that industry with the lenient treatment meted out to so many of the secondary industries.

Mr Gullett:

– There is still 300 per cent, protection for Australian tobacco.

Mr THOMPSON:

– If the Minister will reduce by 40 per cent.: the duties which adversely affect other primary industries. I shall be prepared to vote for the 40 per cent. reduction in the tobacco duties. The tobacco industry, which was providing employment for thousands of farmers and workers, has been absolutely smashed, while the big secondary industries have been let off with a mere tap on the head. Members of the United Australia party should not bo so derisive of the view which the Country party took of the tariff agreement framed before the elections. We entered into that agreement in good faith. We did not chop logic, or quibble over terms. We had not the benefit of the legal knowledge of the honorable member for Martin, who said that it was an ideal agreement in that it was fitted to meet any situation. We regarded it as an. agreement on a tariff policy with which we could go before the people. On the strength of that agreement I assured my constituents that, if the Opposition were returned to power, it would not be a matter of months, but of weeks, before the tariff was revised. We would get to the job immediately, and work out a scientific and rational tariff, After the elections, when it was discovered that, by a miracle, the United Australia party had a majority without our help, the attitude of the leader of that party towards us underwent a marked change. We were then not asked for our advice on tariff matters; but we shall lose no opportunity of stating our case before the people. I have no hesitation in saying that on this particular issue - though in most matters we find ourselves in agreement with the Government - we shall point out to the people that we have been betrayed.

I was confirmed in that opinion when I heard the speech of the Minister for Trade and Customs last night. I thought that he would at least have told us to wait for tariff reform until he could get back from the Ottawa conference - that Heaven-sent excuse for delay. Instead of that, however, he said that the Government proposed to work steadily and gradually at tariff reform, so that, at the end of eighteen months, we might have a decent tariff.

Mr Gullett:

– The honorable member, through his leader, was pledged to effect tariff reform through the Tariff Board.

Mr THOMPSON:

– At the end of eighteen months it will be time to get out another window-dressing policy in readiness for the next election. The Government, however, will not get away with it a second time. If it takes eighteen months to do this job, the Country party will exercise its privilege to tell the people of Australia just what it thinks of the Government. The Minister said that my leader had promised that the tariff would be dealt with by the Tariff Board. What he said was that matters would be referred to the Tariff Board as necessity arose. To a large extent I agree with that policy, but our experience has shown that the Tariff Board is a mere political plaything. I do not know what the opinion of my leader is on this point, but I have been before the Tariff Board on three different occasions as a witness, and I have no patience with it at all. It is a much over-rated authority, and is in need of reconstruction. Until we have a Tariff Board of which 50 per cent. of the personnel represents primary producers, that section of the community will not get a fair deal. At the present time, the board is representative mainly of the manufacturers; it has no country outlook. I do not say that the board does not conscientiously do its job, but it is working along wrong lines. Its system of examining witnesses and collecting evidence is bad.

Mr Gullett:

– The honorable member supported a government which tolerated the board for six years.

Mr THOMPSON:

– I did not know what a farce the board was until I went before it to give evidence. When a witness goes before the board, he puts his case, dealing, perhaps, with a subject of which the members of the board know nothing. They have to refer the matter to expert authority, or to the particular manufacturing interests concerned. Those interests place their side of the case before the board, and are not crossexamined. They are primed with the evidence which the first witness has tendered, and are able to tear it to bits without that witness having an opportunity of refuting them. Such a system is quite wrong. The Tariff Board is a much more important body than a court of law, yet in the law courts a leading barrister - like the honorable member for Martin, for instance - who is paid a high fee to keep somebody out of gaol - is afforded every opportunity to crossexamine witnesses, and probe the evidence. The Tariff Board has it in its power to take away the livelihood of thousands of people, or to impose enormous burdens on the community, yet it is allowed to conduct its proceedings in a most haphazard manner. If the members of the board feel inclined to conduct an inquiry thoroughly, well and good; if not, they are free to follow their own methods.

Mr Gullett:

– A few weeks ago the honorable member objected to legal counsel being permitted to appear before the board.

Mr THOMPSON:

– I said that some competent representative of an industry should go before the board to crossexamine witnesses, and assist the board to arrive at the truth. I was deputed some time ago by the tobacco-growers to put their case before the board. I read my statement, and then sat back waiting to be cross-examined. There was no cross-examination. The representatives of the tobacco combine, which I was attacking, were seatedround the room with their arms folded, looking as if they had no interest whatever in the matter. The next day, when they had my case before them, they tore my evidence to pieces. The board seemed to know a good deal about their side of the case, but very little about mine.

Mr Scullin:

– Could not the honorable member have gone back next day and refuted the evidence given by the representatives of the combine?

Mr THOMPSON:

– I was not asked to do so. The manufacturing interests in this particular case had the benefit of auditors and lawyers to prepare their case, so that they were able to put a comprehensive case before the board. The primary producers were not able to do that. They had to depend on their parliamentary representative to do the job for them. He did it to the best of his ability, but the odds were not even. The act should be amended to enable accredited representatives to crossexamine witnesses on the evidence they tender to the board. If that system were in operation we should get much better reports.

The honorable member for Martin professed to be quite nonplussed by the attitude of the Country party, and said that he could not understand what its tariff policy was. The honorable member for Denison (Mr. Hutchin) asked what we really wanted. The honorable member, as a new member, is experiencing his first tariff debate, but other honorable members have heard the case of the Country party expounded on many occasions, and they know what our policy is. Before a new member attacks the Country party, which has made its real issue the tariff, he should be sure of his facts. The honorable member’s statements are so childish that it is obvious that he does not know what he is talking about.

Mr Hutchin:

– The honorable member for New England has stated that I do not know what I am talking about. I take exception to that remark, and I ask that it be withdrawn.

The CHAIRMAN:

– The Chair cannot regard the remark complained of as being unparliamentary.

Mr THOMPSON:

– I did not mean to be offensive, and I willingly withdraw my remark. The honorable member stated that he wanted to know where the Country party stood. He can easily ascertain that by reading the speeches of the Leader of the Country party and other honorable members. Our policy has been published in every newspaper in Australia.We have delivered it on every platform in this country. Let me read a paragraph which practically summarizes the policy of the Country party. It certainly contains generalizations, but we have to generalize on a big issue. We cannot got down to tin-tacks, as the honorable member for Martin suggested that we should. He wanted to know what each farmer paid for galvanized iron, and wire netting. It is impossible to obtain such detailed information in respect of any industry. After all, if our principles are sound, they should be able to stand upon generalizations.

Mr BAKER:
OXLEY, QUEENSLAND · FLP

– They should be worth voting for.

Mr THOMPSON:

– I invite those honorable members who have said a lot about voting, to stay here to-night, and see how we vote on this issue. The following paragraph is taken from a speech of the Leader of the Country party :- lt is our intention to support reduction in tariff on all commodities which arc vital to the primary producer. The Country party’s fiscal policy can be summed up as “ Sane Protection for Sound Primary and Secondary Industries.” Where it is proved that reasonable protection is necessary to retain or establish primary and secondary industries which aru necessary to the prosperity of the community we shall unhesitatingly support it. This bus always been our policy, as evidenced in dairying, maize, tobacco, and dried fruits industries, all of which absorb a large rural population. We arc opposed to indiscriminate protection. Mere protection of the home market will not be our only consideration. We think it is more important to see that tariffs increase production, and not prices; that wo do not limit our capacity to export enough to pay for what we must import.

Although that statement may be considered by some honorable members to be full of mere generalizations, it clearly sets out the policy of the Country party. We are not a freetrade party, and never have been. We are prepared to support secondary industries which are considered by us to be essential to the welfare of Australia. We have voted for protection for certain secondary industries. The leader of our party made in his policy-speech at the elections a strong feature of the fact that this party helped the Nationalist party to validate the Pratten tariff. He said that the Nationalists and the Country parties stood solidly together behind that tariff. That is conclusive proof that we are prepared to give reasonable protection to sound secondary industries. Our record shows where we stand. We find that every time we open our mouths on the subject of protection some honorable member with a gift of facetiousness, which is not always fitting to the occasion, hurls at us the gibe that we want protection only for primary, and not for secondary industries. Our record disproves that statement. We have supported protection for primary industries, particularly where it is necessary to keep from this country the products of other countries. We do not want foreign butter, maize, potatoes, or tobacco. We can produce all our own tobacco. We do not want the dried fruits of other countries. Lf we were given the opportunity we could glut the British market with our dried fruits. We have supported duties on milk, butter, cheese, condensed milk, bacon, hams, pork, honey, waxes, poultry, eggs, and other commodities, which we do not want to import.

Mr Gullett:

– Most of those commodities enjoy completely prohibitive duties.

Mr THOMPSON:

– No other country should be permitted to dump their goods into Australia in order to take advantage of our high cost of production and our economic conditions generally, which have placed a considerable burden upon the primary producer. Wherever necessary, we have stood solidly behind the protection policy. I know that some honorable, members want to pin us down to a definite declaration as to the extent to which the tariff should be reduced. Every honorable member has his own ideas. Some members of the Country party, who represent electorates in Western Australia, contend that that State is being literally crucified upon the tariff imposed by the representatives of the eastern States, and they desire to get rid of practically the whole of the tariff. But the majority of the members of our party take the view thai protection should be afforded to secondary industries that are useful and necessary to make this a self-contained country. There is no necessity for Australia to have the highest tariff in the world. Some of the present members of the Governmenwere parties to the Scullin tariff, which was passed in a moment of panic. In 1904-5 the average rate of duty was 19 per cent., and in 1930-31, 40 per cent. When the last Scullin tariff was introduced the average rate of duty was 50 per cent. That is a tremendous increase. There are now 70 tariff items of 75 per cent., yet, before the Scullin tariff, there was not one. We have had an enormous increase of protection in respect of which the Tariff Board was not consulted. Yet the supporters of the Government say that the Tariff Board should be the sole arbiter, and that they will not niter the tariff without reference to that body.

Mr Gullett:

– That was alao the policy of the Country party.

Mr THOMPSON:

– The Prime Minister (Mr. Lyons), in his policy speech, made much capital of the fact that the Government would not alter the tariff without reference to the Tariff Board; but he refrained from saying that the highest duties had, in the majority of instances, been imposed without reference to that body. That showed, as a matter of fact, that they were to remain in operation.

Mr Gullett:

– The honorable member advocated precisely the same policy at the election.

Mr THOMPSON:

– The Country party stated that, if it were returned to office, it would institute a radical revision of the tariff.

Mr Gullett:

– Through the Tariff Board.

Mr THOMPSON:

– The Leader of the Country party made it clear that there would be an immediate and drastic reduction in the tariff, especially with respect to items that affected primary production. He said that there would be a complete and scientific revision of the tariff by the Tariff Board, but ‘he did not say that this party would sit down on the job until the board had completed its work. I challenge the Minister to point to any statement in the speech of the right honorable member for Cowper (Dr. Earle Page) to the effect that this party would not alter the tariff without the approval of the Tariff Board. “We proposed to refer to the board the following questions for determination : - (1) What industries are essential and natural; (2) what industries are exotic; (3) what industries hamper the progress of others; (4) what duties are necessary because of Output restrictions. Those, and three or four other questions, we proposed to refer to the Tariff Board; but we did not say that we would wait and allow the backs nf the primary producers and consumers nf Australia to be broken by tariff burdens while the board was investigating certain industries. The Minister has distorted the statements of the Leader of the Country party.

It has been said by some honorable members that the Country party has no tariff policy. That is quite incorrect. We -rand, above everything else, for efficiency. I Miring the discussions on the tariff schedules introduced by the Scullin Government, the present Minister for Trade and Customs (Mr. Gullett) was eternally on his feet talking about the need for efficiency in our Australian industries. The Country party preaches the gospel of efficiency, but we want efficient secondary and primary industries. Only the primary industries of Australia have showed any degree of efficiency during this time of depression.

Mr Gullett:

– Not at all. The great base metal industry competes at world’s parity prices, and pays perhaps the highest wages in the world.

Mr THOMPSON:

– That is a primary industry. I am speaking of all the primary industries of Australia. I assert that they have proved themselves to be thoroughly efficient. The output and weight of our fleece have increased during the last few years-

The CHAIRMAN:

– The honorable member’s time .has expired.

Mr GIBSON:
Corangamite

.- I should not have participated in this debate had not some honorable members, including the Minister for Trade and Customs (Mr. Gullett), stated that our primary industries were inefficient.

Mr Gullett:

– I said nothing of tho kind.

Mr GIBSON:

– If I have misrepresented the Minister I withdraw my statement. For evidence of the efficiency of our primary industries I refer to our merino wool .production. There was a time when our sheep did not produce an average of 4 lb. of wool each. To-day no sheep in the world can get within 3 lb. of the fleece produced by an Australian merino. Both the weight and quality of our wool are superior to those of any other country. The sheep industry has been developed scientifically ever since it was first introduced into Australia, and the flock-masters of this country deserve every credit for the splendid position of this industry to-day.

The wheat industry has also made remarkable progress. I can remember, and so can the Minister for Trade and Customs, when the yield from the wheat districts in the Wimmera was reckoned in bushels per acre, but to-day it is reckoned in bags. Scientific methods have been applied to this industry also. Although the average wheat yield for the whole of

Australia is only eleven bushels per acre it must be remembered that we are growing wheat in large areas where the rainfall is only ten inches per annum. This brings down the average yield for the whole of Australia. While I was in political exile for a couple of years I read the speeches made on tariff subjects in this House by the present Minister for Trade and Customs (Mr. Gullett), and the present PostmasterGeneral (Mr. Fenton). The Minister for Trade and Customs, in the flowery language which he is accustomed to use, referred on one occasion to the manufacturers of this country as being housed in good stables, bedded down, and protected from the fierce winds of outside competition, whereas the primary producers were left to suffer, without any shelter, the cold blasts of open competition on the world’s market. I should not mind the manufacturers being bedded down and protected if the primary producers were not left out in the cold. Now that the Minister is himself the stable boy and is doing the bedding down, I ask him to do something to relieve the sorry plight of the primary producers. If he does so, we shall all be happy.

Mr Gullett:

– Just give us a little time.

Mr GIBSON:

– I remind the Minister that time is of the essence of the contract. I listened carefully to the speech delivered by the honorable member for Martin (Mr. Holman) this evening, and while I admire the honorable gentleman for his legal knowledge and capabilities, I cannot admire him for his knowledge of practical farming. He quoted a statement of the honorable member for Forrest (Mr. -Prowse) relating to a 1,000 acre farm, and, proceeding to dissect the honorable member’s figures, said that they demonstrated that the farmer was meeting a cost equivalent to only ls. 7½d. per acre per annum in duties. That is not the fact. A farmer who owns a thousand acres can crop only 300 acres a year. He must leave 300 acres in fallow and 300 acres under grass. It will be seen, therefore, that instead of being ls. 7-jd. the figure, on the honorable member’s own calculation, should be 5s. l£d. The difference between these two amounts is the difference between success and failure.

Mr Scullin:

– The calculation of the honorable member for Martin was based on the figures of the honorable member for Forrest.

Mr GIBSON:

– The honorable member for Martin, who represents a city constituency, and the honorable member for Denison (Mr. Hutchin), should understand that unless something is done very soon to assist the wheat-growers and woolgrowers of Australia they will be compelled to go out of production. They are able to carry on to-day only with the assistance which the exchange gives them. If it were not for the Paterson scheme and the exchange rate, our dairymen would be getting only 6d. per lb. for their butter fat. It would be impossible to carry on dairying successfully under those conditions. The wheat-grower is getting only 3s. a bushel for his wheat, and he is indebted to the exchange rate for 9d. “of that amount. Our wheat-growers are hanging on the very slender thread of credit given them by the banks and storekeepers, backed up, in many cases, by the Government. This thread may break at any moment. If it does so, the wheatgrowers of Victoria, and of other States, will face bankruptcy. I was talking the other day to a lawyer who lives in one of the wheat-growing areas of Victoria. .He told me that he had been called upon to make an investigation into the position of 300 farmers, and that he was sorry to say that 90 per cent, of them were hopelessly insolvent. This is true of the farmers generally. A statement was made in the press recently that the farmers of Victoria owed the manure manufacturers £2,000,000, and the machinery manufacturers just about as much. The value of an average harvest would not be sufficient to meet these obligations. The Government must do something to assist this industry. If it falls through, the manufacturers will fall through with it.

What is our position in relation to other parts of the world ? We know very well that in consequence of the prohibitive tariff measures adopted by the last Government, many of which are being retained by this Government, France has placed an embargo on the importation of Australian wheat. She used to purchase about 1S,000,000 bushels of Australian wheat annually, but now she is not purchasing a bushel. Germany ha’s placed a super charge of 2s. per case on Australian fruit, a3 against New Zealand fruit. This is a retaliatory measure, pure and simple. Italy is doing the same kind of thing.

We have to remember also that Great Britain is doing everything possible to encourage wheat production. It would be said by some honorable members that the production of wheat in Britain is negligible; but she has 2,500,000 acres under wheat, and her average yield is not eleven bushels, as is that of Australia, but 35 bushels per acre. Moreover, she has guaranteed her wheat-growers os. 7½d per bushel. I should not be surprised if the time came when Great Britain grew practically all her requirements of wheat by doubling her acreage.

Mr Gullett:

– The area that may be put under wheat in Great Britain under the price-fixing scheme is limited.

Mr GIBSON:

– It is not any more practicable ‘to limit the area under wheat in Britain, than it has-been to limit the area under sugar in Queensland. If a man wants to grow wheat .he must be allowed to grow it. If Britain is doing’ so much to encourage wheat-growing, and her efforts succeed, as they give every promise of doing, Australia will lose another valuable market. Australia and Canada have more than 100,000,000 bushels of wheat to market every year over and above what Great Britain can take from them. We must realize that the position of our wheat industry is extremely serious. The position of tho wool-growers is not much better. At the wool sales in Queensland the other day the average price obtained for the wool offered was under 7d. per lb., and wool cannot * be produced profitably at that price. Unless these industries are given some assistance they will undoubtedly go under.

The honorable member for Denison (Mr. Hutchin), and the honorable member for Martin (Mr. Holman) asked for some suggestion as to what should ‘ be done. The honorable member for Indi (Mr. Hutchinson) indicated what was necessary when he pointed out that, according to the report of the economic committee, 15 per cent, of the cost of primary production was occasioned by the tariff. Seeing that interest rates on mortgages and bank advances, and salaries and wages, have been reduced by 22£ per cent, it is time that the manufacturers of this country made some sacrifice. If they are not prepared to do so without compulsion their position will be very much worse when compulsion has to be applied. I should be sorry to see the wheat-growing industry of this country destroyed, but the only way it can be saved is by the manufacturers making some sacrifice.

We have heard a good deal during this debate about the forthcoming Ottawa Conference. Something must be done at that conference to assist the primary producers of this country ; but only the manufacturers can do very much. Unless they are prepared .to concede something in order to make it possible to market our primary products at something over the cost of production our exporting industries must undoubtedly fail. Lamb is being sold at present at 6d. per lb. on the London market; but it is only the exchange rate which makes it possible to grow fat lambs for export. The duties imposed on scores of commodities required by the primary producers could be lifted, and if that were done we could expect success in these industries. Machinery, for instance, is subjected to a duty of 45 per cent., but’ by the time primage, exchange, and other costs are added, the impost amounts to more than 100 per cent. Machinery will not last a lifetime. Even the most careful farmer has to renew his machinery after five or six years. I know that this is a fact, because of my experience in this industry. Our machinery manufacturers have had a wonderfully good innings, and it is time that they came to our assistance. What happened immediately after the Scullin Government placed an embargo upon the importation of machinery into this country? One of our big machinery firms immediately entered into an agreement with an American competitor, and a second American firm practically absorbed another important Melbourne manufacturing concern. It is regrettable that capital raised in Australia, and the profits made out of the manufacture of machinery in Australia should have been sent to Canada for the establishment of a machinery manufacturing works there for the production of machinery for the export trade of that country. The Minister for Trade and Customs (Mr. Forde), in the last Government thought that he had made a remarkable, agreement with the machinery manufacturers, when he offered them a total embargo, if they would reduce their charges. The prices were then about 50 per cent, higher than those ruling in 1914. The manufacturers agreed to reduce them by 5 per cent., but when the sales tax -vas imposed they increased their prices by 6 per cent., with the result that machinery is dearer to-day than when the embargo was imposed. There are scores of farm requisites on which heavy duties are imposed, placing an annual burden on the primary producers. If I mentioned tobacco, the Minister for Trade and Customs and others, would surely say that a 300 per cent, duty should be sufficient; but on many items the duties amount to over 300 per cent. The honorable member for Swan (Mr. Gregory), referred to such extraordinarily high duties as 500 per cent, on men’s cotton socks, 400 per cent, on children’s socks and 600 per cent, on knitted goods. ‘

Mr Gullett:

– Those duties are all under review.

Mr GIBSON:

– Yes, but reductions are not provided for in the schedule before the committee, and the Minister would have us wait many months before these items are considered. If relief is delayed even for a year, I doubt .whether the primary producers will be able to pull through. The duty on kitchen utensils amounts to 1,200 per cent. ! To-day the wages of the primary producers are so low that they will not stand any further cut. The cost to the farmers of galvanized iron is not a recurring expenditure, but the manufacturers of that commodity are given a lot of assistance, to which they are not entitled. On rabbit traps, which are largely used on every farm and station property throughout Australia, the duty is 100 per cent., and there is no proposal for its reduction. It costs 3d. for a cartridge, with which to shoot a rabbit, whereas, formerly, a cartridge cost only Id. There is a duty of 60 per cent, even on the wads used in the manufacture of cartridges.

The duty on copper carbon is up to £10 per ton. The farmers use large quantities of this commodity every year. Every sheep-owner knows how important it is to drench stock. The duty of 45 per cent, on tetra-chloride is so high that it costs over one penny to dose a sheep, and in the production of fat lambs this operation has to be carried out about fortnightly. Practically every progressive farmer endeavours to improve his pastures ; but sulphate of ammonia, which is largely used for this purpose, carries a duty of 25 per cent. On agricultural lime, which is widely employed in making land respond to cultivation, sales tax is charged. I propose to speak regarding the tobacco duties when the tobacco item is under consideration. I trust that the Government will give due consideration to the claims of the primary producers, and endeavour’ to save them from the crash which seems inevitable.

The manufacturers of Australia will have to reach the stage at which they can export some of their goods, and compete in the world’s markets. Canada has almost a monopoly of the manufacture, of farming machinery. It competes with the rest of the world, and its manufacturers pay higher wages than those ruling in Australia. Why did H. V. Mackay and Company go to Canada and establish their industry there? Until the local manufacturers can compete in the world’s markets they will not be doing their duty to this country. When a farmer goes into a shop to buy tools of trade he is supplied with American goods, which are manufactured under labour conditions equal to those obtaining in Australia. Despite a duty of 100 per cent., local manufacturers are not competing with those in the United States of America. »

Mr Lane:

– That country has a population of 120,000,000.

Mr GIBSON:

– It supplies its local requirements, and also meets the needs of 120,000,000 people beyond its own borders.

Mr MARTENS:
Herbert

.- Reference has been made to the wages paid by manufacturers in Canada, but I point out that they are not so high as those paid in this country, except in the case of workmen with special qualifications. The average wage is certainly not equal to the Australian rate. In

Canada mass production has been successfully practised, and I hope that, eventually, Australia will have a sufficient population to enable that system to be put into operation here. The honorable member for Forrest (Mr. Prowse) stated that the Scullin Government, by its action through the tariff, caused one man to be placed on the unemployment market in every four minutes of the period during which it was in office. If that were a fact, that Government would have been responsible for throwing out of work 258,000 persons, which was about the total number of the unemployed in the Commonwealth during its regime. I am not surprised that the honorable member smiled when he made that extravagant statement. The honorable member for Riverina (Mr. Nock), to whose remarks I listened with much pleasure, made one statement which was difficult to understand. He said that the last Government was responsible for the establishment of a certain number of backyard industries. He did not tell us just what those industries were.

Mr Nock:

– The details can be found in the reports of .the Tariff Board.

Mr MARTENS:

– That reply is on a par with that of other honorable members. He also referred to the drop in the amount of railway freight paid on machinery imported into New South Wales from Victoria, and he blamed the Scullin Government for a greatly-reduced demand for agricultural machinery. The death occurred recently of a well-informed member of this chamber, who assured us that if no wages had to be paid by the wheat-growers, their conditions were so bad that they would still be unable to purchase the commodities which they require. Honorable members opposite have been speaking of the need for a reduction of the costs of production, and I suggest that if no wages were paid in agricultural industries, the man. on the land would still be unable to produce commodities for export at a profitable price. In my own State, sheep can be purchased for ls. and ls. 6d. per head. I maintain that wool cannot be produced profitably at 7d. per lb., and I claim that too much importance has been attached to the rate of wages paid in this country. The honorable member for Swan (Mr.

Gregory), I believe, suggested that collusion between the manufacturers’ combines and the trade unions had brought about the present conditions, but that is an absurd statement. The Leader of the Opposition mentioned the cost of boots. In the manufacture of a pair of boots, the cost of labour is 5s., and the retail price is from 30s. to 35s., yet honorable members would have us believe that the trade unions are responsible to some extent for the high prices ruling for footwear. The honorable member for Barton (Mr. Lane), by interjection, referred to the assistance given by the Commonwealth to the sugar industry, but he should know that this Parliament has contributed nothing to that industry.

Mr Lane:

– The people pay tribute to the sugar-growers through the purchases they make from the grocers.

Mr MARTENS:

– The price of sugar in this country is 4-Jd. per lb., and the cheapest sugar in the world is retailed at 2£d. per lb. In nine European countries the average price is 3.8d. per lb., which is not much less than the Australian price, although the Australian product is of finer quality than any produced elsewhere. On that statement I challenge contradiction. So-called friends of the farmers - I refer to the members of the Country party, such as the honorable member for Forrest (Mr. Prowse) - would like the people of Australia to use sugar grown in Papua, where the adult male employees would be paid lOd. a day, and the wages of females would be 5d. a day. That honorable member was probably interested in a proposal to grow sugar in Papua, hoping that it could be brought into Australia free of duty. In Cuba, which is one of the largest sugar-growing countries, more than twelve of the mills are in the hands of receivers. For the last two years the mill employees there have received scarcely any wages at all, most of them having merely been given rations. They cannot profitably produce sugar at the present world prices, and many of them have gone bankrupt. The honorable member for Corangamite (Mr. Gibson) said that in the near future many of the wheat-growers will become insolvent unless the manufacturers agree to forgo some of the protection they now enjoy. In my opinion, the wheat-growers, like most other people in Australia, are already well and truly “ broke “. The so-called “ sugar barons “ of Queensland - I represent four-fifths of the sugargrowers - arc asking governments for a moratorium to save them from foreclosure by financial institutions. They are not in the prosperous and happy condition that many honorable members and newspaper propagandists declare. On at least two occasions I approached the Scullin Government on behalf of the cane-growers for a moratorium. Their present plight is not due to inefficiency. The Hawaiian sugar industry, which is the most efficient in the world, is only 2 per cent, better than that of Australia.

Mr Lane:

– Does not the Colonial. Sugar Refining Company pay the grower for his cane?

Mr MARTENS:

– If the honorable member would take the trouble to learn something of the industry, he would not make such a silly remark. M’any of the mills are - co-operatively-owned and worked by the cane-growers. The Colonial Sugar Refining Company has some mills, and certainly pays for the cane delivered to them.

Mr LANE:

– And that company sells all the sugar.

Mr MARTENS:

– Again the honorable member is disclosing his ignorance. The disposal of the sugar is controlled by a board representative of the Commonwealth and Queensland Governments and the sugar interests. When Mr. Andrew Fisher was Prime Minister, he made an agreement with Mr. T. J. Ryan, the then Premier of Queensland, which is now generally known as the embargo. . Simultaneously the Ryan Government established legislation for a Cane Prices Board, on which the growers have representation, to determine the prices to be paid each season for cane. At that time about 10 tons of cane was required to produce 1 ton of sugar; but because of the planting of better varieties of cane and the improvement of cultural methods, to-day a ton of sugar is produced from less than 7 tons of cane. Land in the Bundaberg district on which cane has been grown for more than 40 years is still producing as heavily as when it was first planted; that is due to the use of manures anc better cultivation. There is no question of the efficiency of the industry, and it is regrettable that a high official of the Commonwealth should have displayed a reckless disregard of the truth when referring to it. The Auditor-General in his last annual report stated that sugar could be bought in Java for £6 a ton, whereas the price charged in Australia for the local product is £36 a ton. From that statement a casual reader would infer that sugar is six times dearer in Australia that it need be. As a matter of fact, the price of Java sugar to-day is approximately £8 a ton, and exchange, losses in transit and handling charges would increase the landed cost in Australia to about £1S. Refining costs would bring the wholesale cost up to more than £20. The workers who produces that sugar in Java are paid lOd. a clay. In Belgium and Sweden the beet crop is cultivated and handled by women and children, .yet 2fd. per lb. is being paid in those countries for a sugar much inferior to the cane product of Australia. The honorable member for Corangamite said that the manufacturers should bring their plants up to date, and make their methods more efficient. That sort of generalization will not bear investigation. Although I do not say that all the secondary industries are 100 per cent, efficient, I am convinced that those people who have made a study of their enterprises in order to compete in the markets of the world and hold their own against their local rivals, have achieved a very high degree of efficiency. It ill becomes the Auditor-General to make the irresponsible statements which he has published regarding the sugar industry, and we are entitled to ask what section in the Audit Act authorizes him to express his views on the amounts that the public spend on picture shows, motor cars, &c. No doubt his report is very interesting, but I have yet to learn that he has any authority to pronounce upon industrial conditions and the habits of the general community. After the Auditor-General’s attack upon the sugar industry, Mr. Doherty, secretary of the Cane Growers Association, sent to him a statement of the facts, but so far as I am aware the misrepresentations and untruths of which that official was guilty have not been withdrawn.

Like some unscrupulous politician, lie uttered lies knowing that if they were given 24 hours start they would be difficult to overtake. I have always been particularly interested in the sugar industry, and I agree with the statement of Professor Brigden before the Arbitration Court that anything done to interfere with its success would be a calamity.

The right honorable member for Flinders (Mr. Bruce), in a speech delivered at the Exhibition Building, Brisbane, in June, 1923, left no doubt of his estimate of the value of the industry after he had personally witnessed what had been done by white settlers in the north of this continent. There is no justification for the untruths that the Auditor-General has published; if he was ignorant of the sugar industry, he could easily have acquainted himself with the facts before making a report’ that will seriously mislead the people. The attacks by the Housewives Association in Victoria and other bodies that are opposed to the sugar industry could not have as much effect upon the public mind as an official statement published above the signature of the Auditor-General. The facts I have mentioned are based on information supplied by the Sugar Board, and I quote from the minority report of the Commonwealth committee, which recently investigated the industry, the following list of prices charged for sugar in various, countries : -

Some of the lower prices included in that list no longer obtain, because, since it was prepared, the value of sugar has risen in the world’s markets. Experts have advised that the lowest price at which raw sugar can be profitably produced is £11 a ton. The present world’s parity prevents many growers from making a living. Hundreds of millions of dollars have been invested by Americans in the Cuban cane-fields, and last year 5,000,000 tons of sugar was withheld from the market in order to keep up the price.

Mr Lane:

– Would not the Australian industry be profitable with a complete monopoly of the local market?

Mr MARTENS:

– But for the promises given by the Hughes Ministry and governments that succeeded it, the output of sugar would be less than it is. and the growers would be doing well if they had not a surplus above the requirements of the* local market. Over £2,000,000 worth of sugar is exported each year, and that has a beneficial effect on the trade balance. The expansion of the industry is entirely due to promises made by successive Commonwealth Governments. Tho honorable member for Corangamite said that a curtailment of sugar production in Queensland is impossible. I assure him that production has already been reduced, and if he will consult newspapers published in Brisbane and in North Queensland he will discover that a lively controversy is in progress regarding the limitation of output. Any restriction of production is due solely to the inability of the industry to sell profitably at present world prices.

Mr Lane:

– The honorable member has not answered my question as to whether the industry would be satisfied with a monopoly of the Australian market?

Mr MARTENS:

– The honorable member does not understand the industry. If only sufficient sugar were produced to supply the Australian market, the growers would be much better off than they are to-day. But because of promises and encouragement given in earlier years, the industry has expanded to its present proportions. The reasons for that expansion were clearly stated by the general manager of the Colonial Sugar Refining Company in evidence before the sugar committee. In declaring that the sugar industry is not natural to Australia, the honorable member for Forrest (Mr. Prowse) disclosed his ignorance of the possibilities of North Queensland. The sugar technologists from different parts of the world say that no better sugar is produced than that from Queensland ; that the sugar content of the cane compares favorably with that of any other country, while no industry is more efficiently conducted. I am prepared to leave it at that.

The honorable member for New England (Mr. Thompson) was very cross because certain honorable members interjected asking if he would be sure to record his vote on certain issues in connexion with the tariff. He was reminded that, had he and others remained and recorded their votes when tobacco was last debated in this chamber, it is quite probable that the Government would have had to reconsider its attitude on the subject.

The CHAIRMAN:

– Order ! The honorable member is not in order in reflecting on a vote that was given in this chamber on another occasion.

Mr MARTENS:

– The honorable member declares that he understood certain things were to be done ; but, because matters did not work out as he anticipated, he has regretted his action. I sincerely hope that, on this occasion, he will have nothing to regret.

The tariff proposals of the Government will have a bad effect on industry, including what some” are pleased to term “ backyard “ industries. Had it not been for the tariff proposals and assistance given by the Scullin Government to industries, particularly in Victoria and Sydney, many more would now be out of work and destitute. The tariff introduced by the Scullin Government certainly saved Australia from a complete smash. This Government is evidently going back to the condition of affairs from which the Scullin Government rescued the nation.

Mr NAIRN:
Perth

.- I shall refrain from the temptation to engage in a discussion of sugar. Nor do I wish to become involved in a general discussion with honorable members of the Labour party on the tariff. From being originally a freetrade party, that group has now become a party pledged to protection, even to the extent of prohibition. It is useless to attempt to compromise, or even debate, with people who have already made up their minds, so I shall content myself with saying that I shall respect their views and agree to differ from them.

Another class of opponent on tariff matters is that to which the honorable member for Martin (Mr. Holman), who represents a Sydney suburban electorate, belongs. I greatly appreciated the moderation of the honorable member, and admired the skill with which he sought to kill by ridicule the claims of the rural industries for some relief from the burdens of the tariff. Summing up his decision to support present rates, the honorable member claimed that the advocates for the rural industries had failed to give any details of just how the tariff affected those industries. He wanted what he termed a scientific and quantitative demonstration of how the tariff pressed on the farmer ; failing that, he was prepared to support the proposals of the Government. If anybody is anxious for a scientific and quantitative discussion on the tariff and its effect, I refer him to the report of the tariff commission which is dated June, 1929, and which extends to 232 pages. It contains a good deal of quantitative information. In its summary the commission states -

We estimate that Australian products which are protected cost £30,000,000 more than the same goods could be imported for, duty free. In considering the cost of protection we take no account of the added price of imported goods because the duty paid goes to the treasury and takes the place of other taxation.

Since that time the duties have roughly been doubled, and I have no doubt that if the same commission were now sitting its estimates would be substantially increased. It is true that the whole of that amount is not paid by people engaged in rural industries, but it is fair to estimate, on the basis of population, that those people pay half of it. Unlike those in city areas, people in the rural districts obtain practically no benefit from the protection given to the industries of the country. Our primary industries have to sell abroad and compete in the markets of the world. They, therefore, have all the disadvantages of protection, and pay the cost of it, without obtaining any of the corresponding benefits which accrue to people in the cities. There is another item of that report which might well be recommended to the honorable member for Martin. Dealing with the operation of the tariff the commission says on page 4 -

The tariff falls with the greatest weight on the export industries. The value of the land and fixed capital is reduced. They are limited to the use of the land which will carry the costs imposed.

However, it is useless to look for any reduction from the Labour party or those honorable members who represent city constituencies, and are directly interested in the maintenance of the tariff.

I was hoping, I think with good ground, that a substantial reduction might be obtained from the party to which I belong, particularly in view of the declarations of prominent members of it. The Pratten tariff of 1928, represented the high water mark of tariffmaking by my party. In 1929, the then Prime Minister (Mr. Bruce) said that, in his opinion, they had already gone far enough with tariffs, and that if there was to be any revision it should be downwards. In 1930, the Scullin Government introduced its tariff, which came as a shock to the members of my party; a tariff which produced enormous retaliation throughout the world against Australian primary products. Honorable members will. recall the weeks that were spent in opposing and delaying it in every possible way. One of its most vehement opponents was the present Minister for Trade and Customs (Mr. Gullett). We thought that, on the declarations then made, if the honorable gentleman became Minister for Customs, we could, at any rate, rely on his sympathy ; that he would do what he could to relieve some of the burden that has been carried for many years by rural people, and particularly by those in outside States such as that to which I belong. Just about one month before the last general election the honorable gentleman addressed the 1930 Club in Sydney, and a report of his speech appears in the Sydney Morning Herald of the 17th November, 1931. It ‘is headed “The Tariff. Overhaul Needed.” The honorable gentleman was careful to point out that his party were not freetraders although an attempt had been made to class them as such. Hd said -

We are sincere protectionists, but we arc not creators of monopoly by law.

He condemned the tariff of the Scullin

Government and declared -

The Scullin tariff had its origin in New South Wales, and its real author was Langism

That is the tariff that he has had an opportunity to alter. In the same speech the honorable gentleman referred to the prospect of a change of government, and said that the Tariff Board as then constituted could not handle the general overhaul of the tariff ; that the job would occupy a single body many years. Only last night the honorable gentleman told us that the overhaul of the tariff was now in the hands of the board, and that he expected that that body would have a complete scheme before Parliament in twelve months. I do not think that there has been any alteration in the constitution of the Tariff Board in the meantime. The honorable member further said - lt would, therefore, bc necessary for the Government to lay down certain lines of policy, and then to appoint a number of investigating tribunals which would consider a particular section of tho tariff, and work simultaneously. The tariff should be thoroughly overhauled with a view to a substantial increase in revenue.

I listened to his speech last night, but listened in vain for any reference to the appointment of investigating tribunals. If I understood him correctly, he does not propose to give any directions to the Tariff Board such as were intimated in his statement of the 17th November. In that statement, he said that it would be necessary for the Government to lay down certain lines of policy, and then to appoint investigating committees. Last night, the Minister told honorable members, in effect, that the Government was going to leave it to the Tariff Board to recommend alterations to the Scullin tariff, but omitted to say that the Government proposed to lay down any policy by which the board should be guided. It is of extreme importance that, consideration should be given by the board to the policy of the Government of the day when it is framing its recommendations. It would be useless for a board consisting of low tariffists to allow their recommendations to- be governed by their opinions if the Government of the day believes in high tariffs.

How far has the Government progressed in the direction of effecting the promised overhaul of the tariff? The Scullin Government introduced 300 increases in items and sub-items. Those increases, the Minister stated, were apparently made by the office boy by the simple process of multiplying the existing duty, sometimes by two, sometimes by four, and sometimes by six. However, whereas the Scullin Government increased duties on 300 items, the best effort of the present Minister for Trade and Customs is to bring down an amending schedule providing for reductions in respect to 69 items, besides increases on several others.

Mr Gullett:

– That is not bad for two months.

Mr NAIRN:

– The Minister is now disposed to take credit for the reductions, though last night he gave the credit to the ex-Minister for Trade and Customs (Mr. Forde). He thanked Mr. Forde for having prepared the way for the reductions by referring items to the Tariff Board. No reductions have been made at the instigation of the present Minister. The Minister also pointed out that the reductions were in regard to minor matters. I think he described the industries affected as exotic industries, so much so, in fact, that it was obvious to the board that the industries had no chance of success in any case. It is evident that there has been no real attempt to review the Scullin tariff. The big national industries, such as the iron and steel industry, machinery manufacturing, &c., have not been touched at all. In respect to them there has been no interference with the Scullin Government’s policy.

Mr Gullett:

– The duties on iron and steel have been brought back to the old 1928 level without reference to the Tariff Board.

Mr NAIRN:

– The iron and steel duties are excessively high now; so high, in fact, that no iron and steel from overseas can be landed here.

Mr Stacey:

– Is the honorable member in favour of immediately reducing all duties to the old level?

Mr NAIRN:

– I am entitled to expect that the Government will reduce duties substantially to the level of the 1928 tariff. I am entitled to claim this on the strength of the declarations made by the Minister, and by the Prime Minister in his policy speech. In that speech, which was published on the 3rd December, the Prime Minister first made it clear that the majority of his party were staunch protectionists, and that they would not agree to any sudden drastic changes in the tariff upon ministerial initiative. He added, however, that the

Nationalist and Country parties stood firmly behind the Pratten tariff. That was the tariff of 1928. To-day, the Minister is not only not standing behind the Pratten tariff; he is standing very closeup to the Scullin tariff. In the Prime Minister’s policy speech there was an implied promise that, if his party were returned to office, the tariff would be revised until it approximated the 1928 tariff. The speeches of the present Minister for Customs (Mr. Gullett), of Mr. Latham and of Mr. Bruce, all tended in the same direction. The present AttorneyGeneral (Mr. Latham), on several occasions expressed his disapproval of the tariff changes of the last Government. Other Ministers were equally loud in their condemnation of high duties. The present Leader of the Government in the Senate (Senator Pearce), frequently described the Scullin tariff as a Himalayan tariff, and pledged himself, when speaking in Western Australia, to use all his efforts to obtain a substantial reduction. The present Minister for the Interior (Mr. Parkhill) was, I think, the most determined and persistent opponent of the Scullin tariff. He was likeCasabianca’s son, who remained “ when all the rest had fled.” He could not be induced to let go, and even his political friends had to agree to the application of the closure so that other business might be gone on with. I admire his persistence, and have great hopes for him. I cannot think that his apostasy can be permanent. The Minister for Commerce (Mr. Hawker), also expressed himself as strongly opposed to the Scullin tariff, and pledged himself, if opportunity occurred, to do what he could to bring about its reduction. This Ministry, according to its pre-election pledges, is committed to bring about substantial reduction of duties. It would probably not be practicable to return in every instance to the 1928 duties, but we should get as near to them as possible, because the 1928 tariff was accepted by our party as the high-water mark of tariff protection.

Sir Littleton Groom:

– Was that part of the agreement with the Country party ?

Mr NAIRN:

– I donot pay any great attention to that agreement. Our own party should honour the pledges madeto the people, though I admit that, at the last elections, the tariff was not, to anygreat extent, before the electors. There may be some reason for considering the tariff again after the Ottawa conference, but I cannot agree that the impending conference should be used a3 an excuse for doing nothing now. The best gesture we could make to Britain at this time, would be to bring about an immediate reduction in the outrageous and antiBritish duties imposed by the Scullin Government. “We, who represent distant States, are entitled to expect that the Government will not postpone tariff reductions, nor seek to evade its obligations by handing the matter over to the Tariff Board.

Mr RIORDAN:
Kennedy

.- This debate has been interesting, because of the quarrel that has developed between members of the United Australia party and members of the Country party, over the agreement entered into between the two parties prior to the last general election. It must in the circumstances have been difficult for the electors to discover the real issue on which they were being asked to vote. The Leader of the Country party is now claiming that his policy is not that of the Leader of the United Australia party. There is a fight between the two parties in respect of the Scullin tariff, which was introduced at a time when it-was necessary to take drastic action to rectify our adverse trade balance. The Minister for Trade and Customs was, when in opposition, more persistent in his objection to the Scullin tariff than the honorable member for Hunter (Mr. James) is in his advocacy of the Lang plan. The Minister for the Interior (Mr. Parkhill) was more persistent in his advocacy of the destruction of the Scullin Government than Mr. Lang was in carrying out his policy in New South “Wales. But it must be said for Mr. Lang and his party that they were more sincere than the Minister for Trade and Customs and the Minister for the Interior. The honorable member for Perth (Mr. Nairn) has said that he is disappointed at the action of this Government in not reducing the Scullin tariff to any great extent. The Scullin Government increased the duties on 400 items, and this Government has made reductions in respect of 70 items, most of them affecting primary products. The Government supporters have already created a feeling of uncertainty in the minds of those engaged in the sugar industry because of their statement that the agreement entered into last year must be voluntarily reviewed. At the last elections the tobacco-growers were assured that there would be no interference with the tobacco duties, and as a result thousands of people invested their small savings in tobacco farms. That investment took 4,032 workers off the unemployed market. As soon as this Government gained office it reduced the tobacco duties, and the feeling of confidence that it said should be restored in the community has broken down, at least in that industry. There is no sincerity in this Government. The honorable member for New England (Mr. Thompson) spoke about principles, and said that they should stand upon generalizations ; yet no member in this chamber is more inconsistent than he. One might refer to the Leader of the Country party as the “ dodging doctor,” because he dodged a division in this chamber on the tobacco issue, at a time when there were sufficient members present to defeat the Government. On that occasion the Leader of the Country party compromised by entering into an agreement with the Government, regardless of the fact that those engaged in the tobacco industry were left in a state of uncertainty. The Bulletin commenting on the attitude of the Leader of the Country party, stated -

The show of last week in Melbourne was provided by Dr. Earle Christmas Grafton Page, vaudeville entertainer, at the Town Hall. Placing the thumb of his left hand in the armhole of his vest, raising his right hand to a level with his head and opening his mouth very wide, the versatile artist caused the Australian tariff to disappear. Leaping lightly on to the trapeze, he then hung head downward by the right foot. Slowly raising his left leg, he placed his left foot on his right kneecap, and, extending the lingers of both hands, seized the National Debt between his teeth and lifted it off the country’s chest.

Jumping quickly to the ground, the artist then swiftly raised his right knee to a level with his hip, grasped his left ear firmly between the thumb and index finger of his right hand, and with his left hand in his pocket balanced six State Budgets and one Federal Budget on his head. Without pausing for breath, he then deftly sprang upon the tight wire, and standing upon one log placed both hands in his trousers pockets. In that position he nimbly doubled the factory output of the country while halving the cost. While still on the wire he lowered himself on to his back, and grasping his right foot in his left hand and his. loft foot in his right covered Australia with flocks and herds. Regaining the floor,he produced a large increase in the population and a rise in the standard of living out of his hat. That ended the programme, and the ushers having wakened the reporters at the press table the meeting adjourned.

Dr. Page’s performance was good, but it would have been bettor still as a silent turn. His patter is of the poorest.

The Postmaster-General (Mr. Fenton), when a member of the Labour party, was a consistent protectionist, and an advocate of high tariffs. Yet when he, the Minister for Trade and Customs (Mr. Gullett), the Minister for the Interior (Mr. Parkhill), and the Minister for Markets (Mr. Hawker) were in Opposition they were most consistent in their condemnation of the Scullin tariff. The Minister for Trade and Customs claimed that the tariff increases introduced by the Deputy Leader of the Opposition (Mr. Forde) had been suggested to him by the departmental office boy. To-day the present Minister is prepared to father the child of the exMinister. The Minister once said derisively that the manufacturers had been stabled and bedded down at night by the Scullin Government, yet to-day he is the stable boy who is stabling and housing the manufacturers. There is no consistency in his a tti tude. Certain promises were made on the hustings by the Leaders of the United Australia party and the Country party, but now that they are in a position to honour those promises they are running away from them. One honorable member said to-day that the Scullin Government, when it took office, was stampeded into introducing a tariff policy which brought retaliation from other nations. I admit that that Government was stampeded. When it took office after fourteen years’ administration by a Nationalist Government, it found this country bankrupt. It was faced with a tremendous adverse trade balance. It became panic stricken, and immediately set to work to place Australia once again on the road to prosperity. The Scullin Government, during its two years of office, did more for Australia than this Government is ever likely to do.

According to the Producers Review, the Prime Minister (Mr. Lyons), at the opening of the Sydney harbour bridge, said that one way to bring about a return of prosperity was to reduce thecost of production. At the close of his speech at the opening of the Sydney Show he said that he did not agree with Mr. Lang’s politics, but agreed with his statement made at the opening of the bridge that all parties should bridge their differences.

The agreement which was entered’ into between the leaders of the United Australia party and the Country party in regard to the tariff policy has been broken within two months of this Government taking office. The Queensland Producer, also commenting on the Prime Minister, said -

page 955

MR. LYONS SHOWS HIS HAND

Does not Believe in Subsidies and Bonuses to Help Primary Industries.

Federal Government opposed to oompulsory marketing. empire trade (or increased imports) the reAL objective.

Speaking at the Royal Show luncheon in Sydney on March 23rd, the Prime Minister (Mr. J. A. Lyons) made a strong appeal to all sections of the community to help Australia. Far above tariffs, he said, was the need for reduced production costs.

At the 1929 elections the present Prime Minister was strong in his condemnation of the then Prime Minister (Mr. Bruce) who, in 1928-29, advocated a reduction of duties. The right honorable gentleman, (Mr. Bruce), is now the Assistant Treasurer. He has been consistent throughout, and I give him credit for his honesty. At the 1931 elections the present Prime Minister was actively associated with the very person whom he condemned in 1929 for having stated that if this country were to be rehabilitated the cost of production must be reduced. This man, who in 1929 was loudest in his denunciation of the right honorable member for Flinders (Mr. Bruce), is now associated with him. The honorable member for Maribyrnong (Mr. Fenton), from many platforms in Victoria, denounced the honorable member for Corangamite (Mr. Gibson), and assisted in sending him into political exile for two years; but he is to-day associated in the Government with those whom he was fighting at that time. What confidence can the people possibly have in a government composed of men who have acted in this way in regard to each other ? These honorable gentlemen talk about honour, but they have evidently broken an agreement which every member of the Country party understood pledged them to downward tariff revision. Yet the Country party is to-day entering another political fight in association with them.

I admire the honorable member for Balaclava (Mr. White) as a fighter. He said some very nasty things to the previous Government about the galvanized iron duties. The honorable member for Henty (Mr. Gullett), and also the honorable member for Warringah (Mr. Parkhill) said that those duties, which were imposed by the Scullin Government, were “ the biggest ramp ever put over “ the people of Australia. But they were only a trifle compared with the ramp which the honorable member for Henty has “ put over “ the tobacco-growers of Australia. I would like the Minister for Trade and Customs (Mr. Gullett) to explain to the tobaccogrowers why Mr. C. H. Reading, a member of the British-Australasian Tobacco Company, who is alleged to have contributed substantial amounts to the fighting funds of the United Australia party, has been appointed a director of the Commonwealth Bank.

Mr RIORDAN:

– In the speech which the Prime Minister (Mr. Lyons) made at the Sydney Show, he also said -

Indeed, it should bc one of the major aims of governments to help those who were the producers of the country’s wealth.

The time had gone by for subsidies and bounties to help primary industries. Neither would extreme tariffs help primary producers. It was necessary to turn attention to the possibility of reducing costs of production.

Australia .ought to be the cheapest producing country in the world’, by virtue of its natural productivity. The Government would resolutely tackle the task of reducing such costs, by administration and by legislation to redress and modify the tendency to pile up the costs of production.

Extreme tariffs would pile up costs out of all proportion to the employment which they would give.

Costs were piled up but in the end there was no real benefit. Particularly there was no benefit to the big exporting industries.

He suggested that instead of trying also to obtain bounties and bonuses for themselves, primary producers would have been better advised to get together with the purpose of keeping down to a minimum the protection given to industries subject to the necessity of building up secondary industries such as were essential and valuable to Australia.

Had the Prime Minister made that statement in December, 1931, instead of in April, 1932, he would not have fooled the people of this country. Although the right honorable member for Cowper (Dr. Earle Page) knew a few weeks ago, when the tobacco duties were under discussion in this House, that the Prime Minister had broken an agreement made with him, he had not the courage to vote against the Government. Again I say that the right honorable gentleman would be well called the dodging doctor “. He certainly knows how to dodge in divisions. He, and all the members of his party, with one or two exceptions, crossed the floor when the tobacco duties were under discussion, and so saved the Government from defeat. The so-called champion of the tobaccogrowers, the honorable member for New England (Mr. Thompson), also scuttled across the floor on that occasion. That honorable gentleman had canvassed honorable members on the train coming down from Sydney that week, and had done his best to discover the attitude of the Labour party in regard to the tobacco duties. He told us that if we would support the adjournment motion the Government would be defeated. After he had voted with the Government on that occasion, he alleged that he had misunderstood the position. He has been in Parliament for twelve years, and he should have known exactly what he was doing. I feel sorry for the people whom he represents. Mr. Lyons, in his speech at the Sydney Show, also said -

We believe that voluntary initiative is tho best. We can only agree to compulsory marketing when it has been demonstrated that existing methods are ineffective, and that the system of voluntary marketing does not allow the producer a sufficient return. We want to treat other nations as good customers, not as enemies.

The best customers the primary producers can have are those who live in this country. The tobacco-growers are trying to secure the custom of the Australian people. To-day we are sending about £3,000,000 annually out of Australia for tobacco, yet this Government appears to be intent on ruining our tobacco-growers. There are 4,000 men on the land growing tobacco. Assuming that each man has a wife and two children, there are 16,000 dependent directly upon this industry. The Australian Tobacco Growers’ J ournal comments on the situation which has arisen in consequence of the Government’s action in altering the tobacco duties, in the following manner : -

page 957

QUESTION

THE TOBACCO INDUSTRY

G uilXOTINBU AND “ GULLETTED.*’ la it nothing >to you, Mr. Gullett, that thousands of men who believed the word “ depression “ only applied to quitters, went out into the forest land, swung the axe, cleared sufficient acreage to carve out a new career, on the promise of you and your colleagues that the tobacco tariff would not be altered? Is it nothing to you, Mr. Gullett, that you have left them to face certain disaster? Is it nothing to you, Mr. Gullett, that all the hopes and aspirations of these virile men and their wives have crashed about their heads and are facing absolute ruin? Is it nothing to you, Mr. Gullett, that you have violated your promise to these unfortunate pioneers of a new industry - led them into the wilderness of despair - ‘because they believed in you and your Government promise? If it is nothing to you, Mr. Gullett, then it is something very serious to us, and if that tariff is passed through Parliament, we will fight you with every weapon we can command. In the meantime, we will see how many supporters of a new Australian industry, threatened with extinction, we can muster in this, our own Australian Parliament. Till the division bells ring, Mr. Gullett,

The Tobacco Growers of Australia

It is interesting to know who the tobaccogrowers got in touch with on this subject. The evasion, side-stepping, shadowsparring, and deceit of the honorable members who worked the confidence trick on the tobacco-growers will not be easily forgotten. These growers work anything from twelve to sixteen hours a day on their holdings, and they are staring in the face of disaster. I quote the following report from the Journal, which deals with the communications sent to honorable members of this Parliament : -

Park Ridge Association immediately wired Dr. Earle Page as follows: - “Appreciate your party’s attitude towards proposed alteration tobacco tariff.”

Dr. Earle Page replied : “ Country party determined encourage local production tobacco utmost possible extent. Will employ all means in our power to that end, including restriction of imports of annual quota, that will ensure complete absorption of Australian-grown crop.”

To Josiah Francis, M.H.R. “ Appreciate your attitude towards disastrous tobacco tariff proposals.”

He replied “ Will forward you Tariff Board’s report earliest opportunity. Would welcome your views thereon, wihicli -will receive fullest consideration.”

Although the right honorable member for Cowper adopted the role of the champion of the tobacco-growers, he assisted the Minister for Health (Mr. Marr), who represents a Sydney constituency, to prevent an effective vote being taken on the subject. The Assistant Minister (Mr. Francis), it will be seen, also side-stepped the issue. He was on the side of the exploiters of the man on the land - those who, led by the city doctor, are “ farming “ the farmers. I remind the committee that to-day the farmers are selling sheep almost at th*e price of eggs. Recently 8,000 sheep were sold to the Winton Fellmongering Company at 6d. per head. A national asset is disappearing, and the National Parliament appears to be doing nothing to save it.

Mr RIORDAN:

– I suggest that when the honorable member for Calare (Mr. Thorby) was a Minister in New South Wales, he might have done something in the direction of reducing harbour dues and rail freights from country districts to the seaboard. I hope that the Assistant Minister for Defence (Mr. Francis) will listen to this further extract from The Australian Tobacco Growers Journal -

The announcement of the alteration in customs and excise duties on tobacco resulted in swift action by local tobacco-growers. An executive meeting of the Sunnybank and District Tobacco-growers Association, of which body there are (15 members, was held at the home of the president (Mr. T. Claude Henderson), and a course of action was decided upon.

Telegrams were sent to Queensland members of thu Federal Parliament, including Mr. J. Francis, member for the district, and Senator Foll. The Premier (Mr. A. E. Moore) was approached, and he promised the association he would get in touch with the authorities at Canberra on the matter. Various members of the State Parliament, representing tobaccogrowing electorates, were also approached, and telegrams were sent to the tobacco-growing organizations at Meadowvale (Bundaberg), Mareeba, Texas, Harvey’s Range, Park Bidge, and Oxley. These associations are now in process of forming a grand council, but this body is not yet in existence, and able to deal with the present situation.

Those men on the land, who have put the savings of a lifetime into the development of the tobacco-growing industry, were promised at the last election that the tobacco duties would not be interfered with, but a confidence trick has been played upon them. I ask honorable members from Queensland to stand by the tobacco industry. I also ask honorable members from South Australia to support me. I have received the fol- . lowing letter from the secretary of the South Australian Tobacco Planters Association : -

The South Australian Tobacco Planters Association desires to place on record its appreciation of the fine efforts you have made in the House of Representatives on behalf of the tobacco-growing industry of Australia.

Your speech in the House on the 8th instant is fully appreciated and endorsed by this association, and has been studied by many of its members with deep interest.

It is sincerely hoped that still more strenuous efforts will be made to rectify the position, and that the industry will be given an opportunity to recover from the staggering blow received at so early a stage in its development by the enforcement of the tariff now operating.

Mr Lane:

– What relation was the writer to you?

Mr RIORDAN:

– If he had been any relation to the honorable member he would have been strangled at birth. Honorable members from South Australia, the honorable member for Indi (Mr. Hutchinson), and the Assistant Minister for Defence (Mr. Francis) should now clearly disclose where they stand regarding the tobacco duties. I also have before me a copy of a letter addressed to the Leader of the Country party (Dr. Earle Page), thanking him for his action when he threatened to defeat the Government because of its attitude to the growers, but voted with it. Mr. W. Little, secretary of the Queensland Tobacco-growers Association, writes, inter alia -

My association, in all sincerity, asks that you continue to fight on the lines you suggest, and, if necessary, carry the fight on to the floor of the House, even if it means the defeat of the Lyons Government.

I can imagine the secretary of the association writing that letter in the tropics at midnight, with the aid of a kerosene lamp, and with mosquitoes buzzing round him, hoping that the Leader of the Country party would help to save the tobacco-growers. I urge the right honorable member to take his stand with members from Queensland and South Australia, the honorable member for New England (Mr. Thompson), members of the Country party who claim to represent the farmers, and also the Labour party, which represents every section of the community, in their fight in the interests of the growers.

In North Queensland alone this industry is capable of providing employment on the land for at least 10,000 farmers. It is not necessary to purchase blocks for them at high prices, because Crown land suitable for tobacco culture is available. The Minister for Trade and Customs promised to consider the alternative proposals advanced by the growers, but the reply given was that the Government would not consider any alternative, because the chief consideration was the revenue derived from the present duties.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– During this debate, I have heardeach speaker making a plea for the section or interest he represents ; pungent remarks have been made concerning tobacco, sugar, barbed wire, and galvanized iron, a flat-iron thrown in by the honorable member for Martin (Mr. Holman) for good measure. But these speakers seemed to have left out of consideration the unfortunate general public who eventually have to pay for the mistakes in fiscal policy made by governments from time to time. Hearing the diversity of opinions expressed by honorable members during the debate, the consumer might well pray to be protected from his friends. The Leader of the Country party (Dr. Earle Page) referred to an agreement made between himself and the Leaders of the United Australia party, and emphasized the need for a scientific tariff. Immediately the honorable member for Denison (Mr. Hutchin) visualized a scientific tariff as one involving thu application of medical science with the doctor busy with lancet and scalpel operating upon the schedule. Thereafter the word “scientific” was dropped. But the tariff should be scientific. The dictionary defines “ scientific “ as meaning the possession of a knowledge of science, which in turn means a knowledge of principles and causes ; ascertained truth or facts; a knowledge classified or made available in regard to life, work, or the search for truth. Therefore .the phrase “ Scientific tariff “ is a happy one. But how is such a tariff to be evolved and applied? The only method is by making use of the Tariff Board, a body of experts who will hear evidence, consider it, and advise the Government. Any policy will serve in days of prosperity, but we have to evolve a policy that will serve the country in its days of adversity. Previous governments blundered into tariffs that were anything but scientific. Having observed the failure of their methods, we should be impressed with the need for giving an undertaking to the people that this Parliament will apply itself to tho problem in a scientific manner by referring all proposed duties to an expert body.

I have a great deal of sympathy with the Country party, but its members would find the committee more responsive if they displayed greater sincerity and consistency. Although they rail against the duties on galvanized iron and other secondary products, they adopt the opposite attitude towards the protection of commodities in which they and their supporters are interested. For instance, they are not satisfied with protection amounting to 300 per cent, or 400 per cent, on tobacco, and because of their inconsistency their appeals on behalf of the primary producer make very little impression on the committee.

The theory upon which tariff policy was originally based was that’ a new country must assist its young secondary industries until they are strong enough to compete with the world. But within twelve months of the enactment of the first Australian tariff there was a definite reaction in the community. For the first time, application was made to the Arbitration Court for higher wages, because the operation of the tariff had so in creased the prices of commodities that the purchasing power of the workers had been reduced. I was interested to hear the Leader of the Opposition (Mr. Scullin) apologize for the tariff schedules introduced by his Government. He lamely explained that’ the country was in a perilous condition, and would have become bankrupt if his Government had not imposed high protective duties and prohibitions in order to reduce the volume of imports. Throughout his speech, he seemed to be apologizing for a policy of protection run wild. He said that young industries had to be protected from the cold blasts of the outside world, until they were strong enough to support themselves. But experience has taught us the unhappy lesson that industries to which protection was given in their infancy have still to be protected in their prime, and on through old age; in fact, the protection has to be carried on to their grandchildren. It is interesting to note how the percentage of duties has increased since 1924-25 ; whereas the average rate of duty in that year was 19 per cent., by 1930-31 it had increased to 40 per ‘cent. The honorable member for Indi (Mr. Hutchinson) drew attention to the increases in tariff items during the years 1921-28, but I think of even greater interest is the remarkable increase iri the number of items carrying heavy duties. In 1908 there were only six items of 40 per cent, and two of 45 per cent. In the 1921-28 tariff, 93 items carried duties of 40 per cent., 72 duties of 45 per cent. ; 35 duties of 50 per cent. ; 19 duties of 55 per cent.; 38 duties of 60 per cent., and 2 duties of 65 per cent.; so that the eight items of 40 per cent, and over in 1908 had increased to 259 items or sub-items in the 1921-28 tariff. At the 30th June, 1930, the 93 items of 40 per cent, had dwindled to 46, and the 72 items of 45 per cent, to 62; but the 35 items carrying duties of 50 per cent, had increased to 38; the 19 items of 55 per cent, had increased to 64; the 38 items of 60 per cent, to 67, and the two items of 65 per cent, to 46, whilst there had been added five items carrying duties of 70 per cent, and 70 carrying duties of 75 per cent. Thus from 1928 to 1930 the number of items or sub-items carrying duties of 40 per cent, and upwards had increased from 259 to 418. That increase is so remarkable that we are bound to look for the reason, and to study its reaction upon the community. High protection leads to a high cost of production. The manufacturers, taking advantage of the margin between their costs and the price at which goods can be imported, allow their methods to become slipshod, and their businesses are npt maintained at that high standard of efficiency which trade competition demands.. Thus their costs are increased. It is necessary to place protective duties on a scientific basis, if only to teach industry the necessity for efficient management and the elimination of waste. High protection, moreover, lowers the purchasing power of the workers, who then demand higher wages. The resultant increase in the cost of production necessitates still higher protection. Thus the vicious circle is completed, and eventually reacts upon the community in its failure to obtain markets, because of the higher costs incurred owing to the increased wages.. Unemployment results, and all industries end up by paying toll to each other. If only one industry is taking advantage of high protective duties the proprietors and the employees may be getting a definite advantage, but when high protection is general, and every industry is bearing the burden of the protection given to other industries, there is a reaction to the disadvantage of the primary producer, and the whole load of customs taxation finally rests upon wool and wheat, the only self-supporting of all our industries, both primary and secondary. As the export trade is vital to Australia, a scientific revision of the tariff is necessary so that we may aid those exporting industries which are producing the real wealth of the Commonwealth. High protection and the adjustment of prices to conform to it make it more profitable for the manufacturers to produce for home consumption than for export. The manufacturer, realizing that he has a better chance of selling his goods in the local market, produces only for home consumption, knowing full well that, by doing so, he is introducing inefficiency into his business.

From time to time governments use the tariff as a vote-catching device. That was very noticeable with the Scullin Administration, which went to the hustings with the . cry of “ Protection for the secondary industries,” and endeavoured to impress the working man by alleging that it would find employment for him. What it actually had in mind was political and not economic protection. When people find that the higher the protection the higher must be the wage necessary to give them an adequate purchasing power, with resultant unemployment, and the destruction of markets, they will realize how spurious such promises are.

The Scullin Government put heavy duties on machinery, at the same time declaring that it was endeavouring to establish our secondary industries. It imposed heavy duties on the very plant required by newly established industries. And here is another anomaly. If tax-free machinery was in a case in which there was a taxable spanner or screwdriver, worth about ls., belonging to the machine, the case would be taxed to the extent of 7s. 6d. or more.

We know that duties have many effects. I shall choose a few that directly affect the individual. We heard the right honorable the Leader of the Opposition trouncing the building trade generally, and pointing out that the laud in cities, on which buildings were constructed, was worth approximately £2,000 a foot. His Government introduced high duties, and gave protection, with the result that investors endeavoured to establish^ highly protected industries. It was necessary to have sites for the factories, distributing centres and offices, and those persons paid for the land they desired at that ridiculous value, so adding to the

C03t of living, and maintaining land values. There is a definite duty upon this Government, either to draw attention to uneconomic industries, or to protect those who have invested moneys in small industries as a result of the policy of the Scullin Government. Allegedly in an endeavour to help the working man to build a suitable house for his needs, that Administration placed heavy duties on imported timber, so that while timber for house-building was roughly £6 2s. 6d. per 100 super, feet, in June, 1914, it cost £47 8s. 6d. per 100 super, feet after the new duties became operative. A similar position arose in connexion with galvanized iron, while the cost of ordinary window glass increased from 100 per cent, to 200 per cent. The very people that that Government was supposed to represent were penalized by that policy of protection gone mad. Coffee was increased by approximately Id. per lb. The Scullin Government failed to realize that the working man’s wife likes a cup of coffee, as well as the wife of the capitalist, and that she cannot afford to pay the extra amount as well as the other lady can.

If a government accepted the reports of the Tariff Board, instead of overriding that body, its efforts at tariff making would be more scientific. I recall that the Scullin Government trebled the duty on dates, again penalizing the household of the ordinary working man, as it also did by imposing a duty of roughly 1,100 per cent, on trochus shell buttons, which are used extensively for garments purchased by working people. Buttons, that previously cost ls. 9d. per great gross in Japan, cost 18s. 5d. after the action of the Scullin Government. One importing firm that used to pay £965 a year in duty had to pay £5,546 after that tariff was introduced. Of course, the difference had to be made up by the unfortunate purchaser -the working man.

Mr Blakeley:

– The honorable memhe] cannot vouch for those figures.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I can prove that they are absolutely correct.

The Leader of the Opposition described the Scullin tariff as effective. It was so effective that it practically eliminated the purchasing power of the already overloaded working man. It merely encouraged inefficiency and bad management, which was contrary to the national good of Australia. By its high duties, the Scullin Government encouraged persons to invest in small uneconomic industries, and unfortunate persons who were deluded into making those investments are now in a desperate position. However, it is necessary to adjust these matters. We cannot continue to build brick on brick in this unstable high tariff wall, for it must ultimately break down.

The way in which the tariff operates is entirely unfair to importers. A shipload of a certain kind of goods may come to Australia, -and the consignment be delivered at its first port of call at the old rate of duty. Then a new schedule is introduced, and the consignment that is delivered at the next port is subjected to a higher rate of duty. That reacts definitely to the disadvantage of the second importer, for retailers and manufacturers naturally buy in the best market. The person who “has been mulcted in the higher duties either has to pile the goods on his shelves, unsold, or leave them in bond, to be finally destroyed. It ought to be possible to evolve a scheme whereby the tariff would become operative as soon as a vessel reached the three-mile limit, or when it made its first’ port of call. There are arguments for and against such a proposal, I know, but if something of the sort could be done, we should be able to have a uniform tariff throughout Australia, and this would be fairer both to importers, and to the consuming public. During the last election campaign, those of us on this side of the House promised that we would endeavour to secure the introduction of a scientific tariff, and the only way in which that can be done is to refer tariff matters to a body of experts. The Government has honoured ite promise by acting on the recommendations of the Tariff Board.

Mr COLLINS:
Hume

.- I have listened with mixed feelings to this debate. I was inclined to be a little disturbed when I heard the honorable member for Kennedy (Mr. Riordan) giving what might be described as a vaudeville turn, but I was consoled by the reflection that “ a little nonsense now and then is relished by the wisest men “. We have heard much of an agreement entered into between the Country party and the United Australia party, but on a matter of this kind there should be no need for agreements, because the tariff is of such vital importance that the attitude of every representative of the people towards it should be to do what is in the interests of Australia as a whole. We should not allow ourselves to be tied by party political considerations. I favour a tariff, because it is necessary to protect our industries, but the tariff must be scientifically framed. Some of the duties introduced by the Scullin Government were protective, some were prohibitive, and some were merely ridiculous. Some industries have been unduly protected, and some have been needlessly sacrificed. In Goulburn not 60 miles from here, there is a thriving industry producing hair cloth. The protective duty was removed, the market was flooded with imported material, and from 100 to 150 men engaged in the industry will be thrown out of employment as a result.

The Leader of the Opposition (Mr. Scullin) spoke this afternoon of the wheat guarantee proposal of his Government Other honorable members spoke of what was being, or should be done, for the primary producers. The honorable member for Hunter (Mr. James) said that at any rate, few of the primary producers were on the dole. Thank God they are not, because it would be a bad thing for the rest of the community if they were reduced to such a plight. The Scullin Government’s proposal for a guaranteed wheat price sent half the farmers of the country limping on the road to bankruptcy, because they had raised money on every assent they possessed in order to purchase the machinery necessary to sow and harvest their crops. The right honorable member claimed that his proposal was defeated by the Western Australian representatives in the Senate. If his Government had been sincere in its proposal to guarantee the wheat farmers 4s. a bushel, why did it not proclaim the act under which they were to be guaranteed 3s. a bushel, when that act passed both Houses of Parliament? As a result of the disappointment suffered by the farmers on that occasion, they have become wary of government promises, and the depleted numbers of the Opposition to-day bear witness to the resentment of the farming community at the broken promises of the Scullin Government.

The honorable member for Kennedy said that we “ squibbed “ the issue when the vote was taken some time ago on a motion for the adjournment of the House to discuss the reduction of tobacco duties. Members of the Country party voted with the Government on that occasion, because they were promised that a further opportunity would be afforded them for discussing the matter. We did not vote against the interests of the tobaccogrowers; our sympathies are with them. It could not be otherwise, when we have before us the spectacle of the growers, with their wives and families, working long hours to raise and harvest their crops. We could not but feel resentful at the action of the Government in reducing the duties, and exposing the growers to overseas competition, on the very eve of the harvesting of the ‘Australian tobacco crop after they had committed themselves to storekeepers for supplies ot to financial institutions for funds to enable them to grow and process the leaf. I have here a letter from the secretary of the Southern Tobacco Growers Association, which reads as follows : -

At a special meeting of thu Australian Tobacco Growers Association held in Melbourne on the 19th April, a motion was carried that State associations press for the alternative proposal put up at Canberra regarding tobacco duties. I have been requested to write you, requesting you to resist tobacco duties now existing, and support the alternative proposal submitted to the Prime Minister and Minister for Customs a short time agio by a deputation representing growers.

Every opportunity and encouragement must be given to secondary industries, but they - must not be bolstered up at the expense of primary industries. I believe in a protective tariff, but not in a tarin which jeopardizes our trade relations Wit other nations. Until recently, Frames used to buy £7,000,000 worth of cur wheat annually, while we imported from France £3,000,000 worth of goods, consisting chiefly of cosmetics which, though not necessary to our women, are much in favour with them. Because of the high duties imposed on goods coming from France, that country has now ceased to buy our wheat. Our trade with Japan was also a very valuable one, but because we placed-a prohibitive duty on Japanese silks, and other goods from that, country, she is evincing a disposition to buy her. wool from other countries than Australia. We must realize that we are not serving the nation by bolstering up an industry worth £3,000,000 to us if, at the same time, we lose overseas trade worth £14,000,000 a year.

We have heard a great deal” about, the need for reducing costs of production, which, it is said, can be done only by reducing wages. To reduce wages will not help us to lower costs of production. While commodity prices remain high, the workers must he paid a fair wage to enable them to live comfortably. The first step should be the prevention of the arbitrary fixing of prices. This is done too often now by business men gathered together over their wine and cigars. They should be compelled to put their goods on the market to be sold at competitive prices. We should abolish price fixing, and attack the cost of distribution. In this way, prices may be reduced, and living made cheaper, after which we may talk of reducing wages, because the workers will have some margin to come and go on.

I can speak for the primary producers, because I am, unfortunately, one of them. I say “unfortunately” because there is no profit in being a primary producer; but I can, at any rate claim to know the conditions under which the primary producers work. Recently, 1 purchased a mower for cutting iueerne. The price was £50 cash, and at one time I used to be able to buy knives for such a mower at 12s. 6d. each. A little while ago, I broke a knife - this is quiteeasy to do if the knife strikes a piece of fencing wire - and I had to pay £2 4s. 9d. for a new one. What is the use of maintaining an industry to manufacture machinery if the price at which it, is produced is so high that the farmers cannot afford to buy it ? No good is achieved by making wire netting in this country if its price places it beyond the reach of those who should provide a market for it.

Sitting suspended from 12 midnight to 12.30 a.m. (Thursday).

Thursday, 19 May 1932

Mr COLLINS:

– I listened attentively to the speech of the honorable member for Martin (Mr. Holman). He stated that the tariff merely imposed a tax of a few pence on the farmer and producer; but let me inform him that it is the accumulation of these small charges that has caused distress among the primary producers. I am surprised that an honorable member who represented country districts for so long should be so ill informed on tariff matters. Other honorable members have attacked the Government for trying to help private enterprise; but, in view of the fact that private enterprise employs four-fifths of the Australian workers, it is only right that it should be encouraged by this Government.

Many unscrupulous party politicians make election promises which they never intend to carry out. All sorts of promises are made in return for votes, regardless of cost and of the moral effect upon the community. The Government, instead of expending every penny of its revenue in expanding the Public Service, should pay more attention to the primary industries, which are the mainspring of the national mechanism. A country cannot be taxed into prosperity. The Common wealth Parliament should set national standards and give the people national inspiration. It should guard against the abuse of power and against improper combinations. It should administer the law equitably, carry the fruits of research to the primary pro- ducers, exploit markets, and, by wise and sane administration and the proper expenditure of public moneys, provide undertakings to assist in the development of our limitless national resources. The Government, instead of encouraging monopolies, should allow the people to obtain for themselves the necessaries of life; otherwise their independence and initiative will be gradually sapped. Irrelevant and foolish arguments have been used in this debate by honorable members who claim to speak for the great primary industries of this country. Some of them have no practical knowledge at all ofcountry conditions. In this Parliament men are needed who will be capable of undertaking scientific investigation; men with business knowledge; men with practical experience of the conditions of primary production; and men who will be prepared to give to the producers the sympathy that has too long been denied them. I urge honorable members to drop all feeling of resentment, and to consider the tariff in a businesslike and statesmanlike manner. I hope that the Government will ultimately revise the tariff so as to place primary industries on a proper footing, and thus bring about the restoration of industry and rehabilitation of this country’s finances. Only by that means will Australia go ahead by leaps and bounds to the great nation that it is destined to become. The farmers are a cheerful lot, and the following adaptation of Lawson’s words have close relation to our present position: -

Brother mine, and of misfortune! times are hard, but do not fret,

Keep your courage up and struggle, and we’ll laugh at these things yet.

Though there is no corn in Tumut, surely Gundagai has some -

Keep your smile in working older for the better days to come!

We will often laugh together at the hard times that we know,

And be measured by the tailor “ when the Tariffs getting low.”

Mr WHITE:
Balaclava

– I hope that this tariff schedule is only an instalment of tariff reform, and that further instalments will be brought down later. At all events it is an earnest of this party’s attitude when in opposition to the Scullin Government, against, not protection merely, but actual prohibition. I compliment the honorable member for Riverina (Mr. Nock) on his thoughtful, if not altogether explicit, speech. We have heard the speeches of two sectional parties in this chamber. One contends that the Government is reducing the duties, and the other, that these tariff proposals do not provide sufficient relief for the primary industries. The Leader of the Opposition (Mr. Scullin) made much of the fact that his Government adjusted the country’s trade balance, but he took strong exception to the statements of some honorable members that it w as the poverty of the people - the loss of the purchasing power of the community - that helped to rectify the adverse trade balance. He did admit that the fact that less money was being’ expended had had some effect in adjusting the balance of trade. Some members of this party supported the Scullin Government in respect of the trade adjustment prohibition items because it was obvious that the trade balance had to be adjusted. But our complaint was that the tariff making generally was too crude. To the Scullin Government it was a mere increasing of duties and giving of bounties. That Government would have acted in a more statesmanlike manner had it en deavoured to keep people in employment as well. The measure of protection that was then given to certain industries caused disorganization among many established businesses, and, as a result, many men were thrown out of employment. The Scullin Government could not distinguish between the different classes of tariff interference - between what was actually protective, what was revenue producing, and what was for the purpose of trade adjustment. It did not realize that it was. strengthening the hands of certain monopolies. I agree with the honorable member for Riverina that price- fixing is one of the greatest evils in our midst. Although a prohibitive tariff prevents competition from outside, it does not prevent corporations possessing great financial power from crushing internal competition to enable them to control prices and to exploit the public. It is common knowledge that this is the case in the building trade. We have heard the oft-repeated story of galvanized iron and the high prices charged for that commodity, but those prices do not compare with the high prices charged for cement, bricks, timber, glass, iron and steel, which are all controlled by monopolies. This Government should pay some attention to combines that are exploiting the public by price-fixing and other methods. Legislation against trusts is difficult, but where such methods can be proved, the tariff protection afforded the industry concerned should be withdrawn. Another sectional party in this chamber has divergent views. Some of its members are complaining of the unjust treatment of the tobacco-growers. Evidently a tariff protection of 300 per cent. is inadequate for them. Yet those honorable members cavil at a mere protection of 30 per cent. or 50 per cent. for secondary industries. We have been accused of having broken our election promises and betrayed the people. The Leader of the Country party, in his policy-speech, stated -

The Country party proposes to make immediate reductions in tariff on all commodities which are not being manufactured in Australia or which are not being manufactured to any serious extent, particularly machinery and tools of trade. All prohibitive duties will be revised immediately in the light of this policy. It is not our intention to smash wellestablished and properly conducted Austra- lian secondary industries, but we will see that sufficient protection is afforded those industries to ensure their continuance upon efficient lines. To ascertain which arc the efficient and economic industries in relation to Australian customers we shall refer carefully to the Tariff Board to determine.

The Country party, which professes to stand for the man on the land, has proved to be largely a party of geographical protectionists, with, of course, some notable exceptions, such as the honorable member for Corangamite (Mr. Gibson), who usually takes a broad and national view. I remember that one honorable member who stood for high protection on diesel engines manufactured in his electorate and also on sugar, was a low tariffist in respect of secondary industries generally.

The honorable member for New England (Mr. Thompson) has raved for some time about what he termed the injustice that had been done to the tobaccogrowers, and in the course of his speech to-day he made a very unfair attack on the Tariff Board. In my opinion, the Tariff Board is properly founded. It is an expert body which is thoroughly representative, and it is qualified to make the inquiries which are expected of it. It is ridiculous for any honorable member of this Parliament to set himself up as an authority on the many and diverse subjects which are dealt with in the tariff schedule; yet the honorable member for Forrest (Mr. Prowse) takes every opportunity to bleat about each item on the tariff, and to talk about the starving “ cookies “ - we know how he starves-

Mr Prowse:

– Does the honorable gentleman disagree with the statement made on behalf of the Government that this country is totally dependent upon our exporting primary industries?

Mr WHITE:

-The honorable member is just as ineffective in his “interjections ashe was in his speech. I was saying that the Tariff Board, which is composed of experts, and is in the nature of an open court, is thoroughly competent to inquire into any tariff matters. Any person may give sworn evidence before the board for or against any proposed duty. ‘ I believe that when the first Tariff Board was set up, the producing interests and the manufacturing interests were both represented, and they have been represented ever since.

Mr Gibson:

– Some one with general knowledge is also needed.

Mr WHITE:

– That is so. The chairman of the board is an independent member with wide knowledge. The Government has said that it intends to be guided very largely by the decisions of the Tariff Board. The honorable member for New England during the debate to-day said that the Country party would not be let down again by the United Australia party. The fact is, of course, that the United Australia party is the party which holds the confidence of the people. That was demonstrated at the last federal election, and it was demonstrated again last Saturday in Victoria. In the new Victorian Parliament the Country party will have the same number of seats as it had in the old Parliament, whereas the United Australia party will have eighteen more. Many of its parliamentary members represent country constituencies in which they were hotly opposed by candidates of the Country party. There are members in this Parliament who have been sent here in the United Australia party interests to give real representation to. rural constituencies. I refer to the honorable member for Indi (Mr. Hutchinson), the honorable member for Wannon (Mr. Scholfield), and the honorable member for Macquarie(Mr. John Lawson), as typical instances.

Mr Prowse:

– What point is the honorable member making?

Mr WHITE:

– I am showing that although the Country party has claimed for many years that it alone is the friend of the farmers, the fact is that the United Australia party represents the farmers in a very real sense, as it does every other class of the community. It is time that the Country party adopted a less self-centred attitude. Prior to the last federal election, and also after the election, it was given the opportunity of merging into a real national party, but failed to accept it. Two days after the Lyons Government assumed office, the Leader of the Country party (Dr. Earle Page) predicted that it would have a short life.

Mr Paterson:

– The right honorable member has denied that he ever made such a statement.

Mr WHITE:

– A statement to that effect was attributed to him in all the newspapers.

Mr PROWSE:

– The honorable member’s speech is not likely to create a fraternal feeling.

Mr WHITE:

– In that respect it is like the speech of the honorable member for Forrest. It is regrettable that the Country party will not merge itself into a truly national party. I realize, as do other members of the United Australia party, that our exporting primary industries are the backbone of the country. We agree also that they should be left unhampered to the greatest possible extent by tariff restrictions.

The honorable member for Martin (Mr. Holman) was very strongly attacked to-day for making some observations about the imposts which the duties on galvanized iron and wire netting imposed upon” the farmers; but our tariff policy has been very beneficial to the farmers, particularly in its effect upon the manufacture of agricultural implements. In the report of the Tariff Board on agricultural implements the following paragraph appears: -

The primary producers have derived very material benefits from the existence of the agricultural implement industry. It would not be unreasonable, therefore, if they were called upon to contribute to its support to a limited extent through the medium of customs duties.

Later, the same report states -

Australian-made implements are sold cheaper ill this country than imported implements in New Zealand or the Argentine. So it is only reasonable to assume that if there were no implement industry here the farmer would he paying a higher price for implements. It may safely be said, therefore, that the tariff on agricultural implements is imposing no burden on the primary producer.

Even if the farmers are paying a little more for Australian-made implements than they would pay for imported implements, it must be remembered that the industry is providing work for the Australian people.

Mr Scullin:

– The agricultural implementmakers of Australia have designed implements which are more suitable for Australian conditions than imported implements.

Mr WHITE:

– That is so. In the treatise known as the Australian Tariff, by Professors Copland and Giblin and Messrs. Dyason and Wickens, this significant observation is made -

The evidence available does not support the contention that Australia could have maintained its present population at a higher standard of living under freetrade.

In my opinion, the Government should try to arrive at what should be the maximum ad valorem duty. It is impossible to fix a flat rate of 50 per cent, to apply to all classes of machinery, for instance, but it should be possible to lift some of the very heavy duties which are in operation at present. In addition to the duties which were imposed by the last Government, there is now the protection afforded by the exchange rate, the primage duty, the sales tax, and the natural charges for shipping and so on. In view of the approaching Ottawa Conference at which Australia will be well represented, I think it would be a commendable gesture if Australia, with the object of showing that her sentiment is favorable to Great Britain, would lift the primage duty on British goods, while allowing it to remain on foreign goods. That would show that we were determined to give preferential treatment to Great Britain. If that policy were adopted, the work of the Tariff Board would not be interfered with, and we should avoid a good deal of controversy over contentious items such as books, and the like. I know that the Government is in very great need of revenue to pay for the services of the country, but if we were to give preference to Great Britain in the way I have suggested, I am sure that Great Britain would respond with a quid pro quo.

In my opinion, the Government is revising the tariff in a sane, sensible and progressive way. The work may not be progressing as rapidly as some of us would like, but inquiries are necessary into the very many items on the schedule. The members of the Country party have been trying to bring about a crisis over the tobacco duties, but the Government is endeavouring to preserve all the useful industries’ of Australia, and to ensure that they will provide the maximum amount of employment.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I regret that personal bitterness has been introduced into some of the speeches delivered by honorable members to-day. There should be no need for this. As one who is in favour of the gold bounty, and of a bounty of some kind on wheat, I agree that the secondary industries of Australia should be protected, but not unfairly. The honorable member for Wentwortb (Mr. E. J. Harrison) in his speech this evening dissected the speeches made by every other honorable member in this debate, giving about two minutes to each, and after devoting an extra’ 30 seconds to the speech of the Leader of the Opposition (Mr. Scullin), he seemed to prove to his own satisfaction that he, himself, had made a fine speech. It appeared to me that the honorable gentleman spoke from the notes which he used during the last election campaign. Although he attacked the Leader of the Opposition, he failed entirely to tell us what the Government proposes to do in regard to the larger question of complete tariff revision. The honorable gentleman totally disagreed with the opinions of another member of his party, the honorable member for Perth’ (Mr. Nairn), and argued that scientific protection was necessary. He used the word “ scien tific “ very many times, doubtless with the object of convincing us that his own speech was of that character. He then went on to discuss the tariff policy of the detested Labour Government. Out of the welter of words which he uttered it appears that this Government has done very little. Personally, even if I were a high protectionist representing an industrial constituency in an eastern State, I could not find much fault with what the Government has done so far. It is true that it has the manufacturers on their toes because it has threatened to do certain things, but actually it has so far done very little. Some of the prohibitions imposed by the Scullin Government have been removed. Biscuits, laundry blue, candles and confectionery are now being admitted, and it is particularly unfortunate for the primary producers that the prohibition placed on eggs has also been lifted, since Australia exports to Britain a considerable quantity of eggs in competition with

China and other countries. Other prohibitions which have been removed are those imposed by the last Government on preserved meats, pork, dried milk, onions and soap, which, in the main, are the products of primary industries. Therefore, I fail to see that this Government has done much to help the primary producers. It has removed the duties on cotton yarns, and that action greatly perturbed those interested in the development of the cotton industry in Queensland. In its action in connexion with tobacco duties, the Government has given an advantage to American growers, to the detriment of Australian primary producers.

If I were a high protectionist I should have little fault to find with what the Government has done, but as a primary producer there is much of which I could complain. The party spirit displayed in this chamber over tariff matters reminds one of the controversy that has taken place for years in the United States of America, where the primary producers consider that they have not been shown sufficient consideration. Within a period of five years, over 1,000,000 men have been forced off the land, whereas the manufacturers in that country, up to 1928 or 1929, at any rate, were in a particularly happy position. The interests of rural districts will always clash with those of the cities and towns. My electorate is almost entirely a primary producing district, the settlers being engaged chiefly in wheat-growing, pastoral pursuits, and mining. There is ground for complaint that . the present Government has not stood up as well as it might have done to the lavish promises made by the Prime Minister (Mr. Lyons), who has a knack of making general assertions which make it difficult to pin him down to definite promises. It seemed to me that at the last election he conveyed the impression that, if returned to power, he would do much to satisfy the claims of the Leader of the Country party (Dr. Earle Page) with regard to tariff reform.

The high prices of farming machinery impose a burden upon the primary producers, but even if Australia were a freetrade country, those prices would comprise a large proportion of the production costs of the man on the land. In South

Africa and the Argentine the farmers have to pay almost as much for their machinery as is charged in Australia. I admit that there is room for a reduction of those costs in this country, but I claim that locally-made farming machinery is the best in the world for Australian con;ditions. These costs are high because expensive machinery has to be replaced every few years. The fact that the MasseyHarris Company has amalgamated with the Sunshine Harvester Company in order to retain a footing in the Australian trade indicates the marked progress made by local manufacturers in their determined effort to meet the needs of the farmers of the Commonwealth. A new primary industry, that of rice-growing, has been established in the Riverina. I have seen the obsolete methods employed in Java and China, where rice is cut by hand, but as soon as the rice-growing industry was inaugurated in Australia the Sunshine Company produced an excellent machine, which enables the crop to be gathered in a most expeditious manner.

Mr Thorby:

– It is similar to the wheat-header or harvester.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– H. V. McKay Limited showed once again that Australian manufacturers have a remarkable facility for accommodating themselves to new conditions. Their rice harvester is unique, I believe. Similarly, the stumpjump plough was invented in this country. Dry farming methods have been developed in Australia to such an extent that the prospects of wheat-growing in poor country where there is a small rainfall have been revolutionized. The farmers of Australia are not much worse off in the matter of machinery costs than are their competitors in New Zealand and South Africa. I am aware of the necessity for replacing farming machinery every three or four years. The cost of spare parts imposes heavy burdens on the producers, and the local manufacturers having been given a monopoly as a result of the tariff, they should patriotically meet the needs of the primary producers at the lowest possible prices. Nevertheless, our manufacturers cannot be expected to supply machinery as cheaply as those in the United States of America, where massed production is successfully practised. The average annual output of wheat in Australia is about 146,000,000 bushels, compared with an annual yield of 871,000,000 bushels in the United States of America, and 476,000,000 bushels in Canada. Farmers in the United States of America and Canada produce nine times as much wheat as is grown in Australia. The population in those two countries is 130,000,000 as against 6,000,000 in the Commonwealth. The manufacture of farming machinery is one of our major secondary industries, and it should be encouraged. The low prices received for wheat in the last year or two have helped to militate against a reduction of the selling price of this machinery. The farmers have had to manage as well as possible with their old plants, and as the manufacturers’ output has been considerably reduced, while their overhead costs have been steadily maintained, it may have been difficult to reduce the prices of machinery without incurring considerable loss. The farmer in Australia, as in every other country, is in such a position that he is seeking relief from any quarter, and he is anxious to reduce his cost of production. But I am sure that no reduction of the tariff which we can effect would make wheat-growing profitable at the present prices. In South Australia yesterday, wheat was sold for 3s. a bushel at the port of shipment, and in Melbourne it was 3s. Id.; probably in “Western Australia the price was slightly less. From these rates 3d. a bushel has to be deducted for bags. At this price wheat-growing could not survive even if the duties on agricultural machinery and implements were removed, and the American manufacturers were prepared to sell at home market rates plus freight. Wheat-farming does not pay, and cannot be made to pay until the world position alters. How can the farmer reduce his costs? Whatever justification there may be for the manufacturers’ complaint of the cost of labour, there is not the slightest doubt that the wages cost to the fanner is at a minimum. The rural workers are not, organized, and if the farmer so desired, he could get as many’ men as he required to work for their tucker. I do not say that he will get the best men under those conditions, but he can get efficient labour for a wage which is certainly not a burden on his industry. Another factor to be considered is the tariff. I am certain that no government would greatly disturb the existing rates. If the Country party really expects such a reversal of fiscal policy, it is entertaining a forlorn hope. I have heard parliamentarians in Western Australia advocating free trade; even candidates of the United Australia party in Western Australia must sign a declaration that they will fight for almost the abolition of the tariff. Senator Pearce has done that for years, but the policy pursued by the Governments of which he has been a member, suggests that he has made no effort in this direction or that his influence in Cabinet is very slight. There are big vested interests behind the protectionist policy, and even though the farmer believes that the cost of machinery is too high, he cannot but feel patriotic pride when he visits an exhibition of manufactures, and notes the quality and variety of goods that are made in this country, despite its comparatively small population.

The methods and habits of the farmers will have to be changed. During the years of high prices every farmer, like every government servant receiving £5 a week, thought he was entitled to a motor car. In my own district, I have known u man to motor 5 or 6 miles into the town to make purchases, remain to have ;> few drinks with friends, and on his return to the farm find that he bad forgotten to buy butter; nothing loth, he immediately returned to the town, a drive of about twelve miles there and back, at a cost of 5d. or 6d. a mile, merely to get 1 lb. of butter. Again if Wyalkatchem was playing football against Bullabulling, thirty miles distant, the farmer thought nothing of motoring his whole family to see the match. In the days when he was dependent on a horse and trap he never thought of driving thirty miles to witness a football match; but at the time of which I speak he considered himself a landed proprietor, almost in the same class as the squatter.

Mr McClelland:

– Does no other section buy motor cars?

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– All sections of the community developed habits of extrava gance during the bounteous years, but some of the luxuries, to which we have become accustomed, will have to be surrendered. Another cost that will require consideration is that of the power tractor. A great controversy is raging about the desirability of returning to the horse. My experience of tractors convinces me that it may be necessary for the farmers to return to horses, which can be locally bred, and fed on Australian produce. This will be better for the country than the importation of tractors, which are operated with foreign kerosene and petrol, purchased at an annual cost of many millions of pounds. Saddlery, blacksmithing, and horse shoeing, which have become almost lost, trades, will then revive. Some people are difficult to convert. Farmers who have purchased tractors with Diesel engines believe that new tractors have been evolved which will be cheaper than horses. In any case the highly efficient, but costly caterpillar tractors, which have been used in the past, will have to be abandoned.

Taxation presses heavily upon the farmer. I do not say that, he should not bear his share of the burden of taxation, but the wheat-grower is amazed to find that although he has a turnover of many thousands of pounds annually, he is £1,500 or so to the bad at the end of the year. It is essential to keep the farmer on the land. The railways would be in a hopeless condition if many of the primary producers were forced to abandon their enterprises. Unfortunately in Western Australia large numbers of men are being forced off the land. A few years ago men were induced to take up farming, because of the assurance of an overoptimistic Premier, that with the support available from the Agricultural Bank and other government sources, men could establish themselves in farming without capital. While the good seasons lasted they prospered, and launched out extravagantly in the manner I indicated earlier. I admit that we all have been extravagant, but we are now modifying our ideas. In Western Australia the farmer has to pay a heavy vermin tax to the Commonwealth Government and another to the State Government.

Those who during this debate ha v , spoken on behalf of the farmers have not laid sufficient stress on the burden of bank interest. That is the ball and chain about the ankles of the primary producer. The bank interest rate to-day is 6£ per cent. The reduction contemplated by the Premiers plan has never reached the farmer. If the interest rate were reduced to 5 per cent., a man with an overdraft of £5,000 - which is less than the average in Western Australia - would save £75 per annum. That would keep a whole family in its grocery needs for a year. Of equal importance as a reduction of tariffs is a reduction of interest, and it can be quite equitably made. Everything indicates that the banks will make a reasonable reduction in interest rates. The British Government expects to convert its huge war loan of over £2,000,000,000 at 2£ per cent. Some honorable members claim that the very high tariff introduced by the Scullin Government is weighing heavily upon the community. It has to be remembered that in 1928, £29,500,000 was received in customs revenue, whereas this year the amount will be about £17,000,000. To that extent the burden is lightened.

There are two industries in Australia, which we must stand by.

Mr Archdale Parkhill:

– The gold industry for example.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Thanks to the action of the Scullin Goverment, the gold industry is fairly well provided for. If I were inclined to ramble I might suggest that the exchange rate should be pegged. Given good seasons, our wool industry, although in a bad position, is perhaps a little better situated than our wheat industry. The duty of the Government, if it continues a high tariff, is to assist our wheat-farmers, and to continue the 4½d. a bushel bounty which was granted by the Scullin Government. I hope that that will be done, and that we shall have the support of the Country party in advocating such a course of action.

Mr PERKINS:
Monaro- Assistant Minister · Eden · UAP

– I listened with a great deal of attention to a number of the speeches that have been made during this debate, and I find that there is little indeed that calls for a defence from the Government. All sorts of subjects have been dealt with, from ships to sealing wax, which I shall not refer to specifically. I admire the consistency of honorable members of the Labour party. They stand for a high tariff, and it is only natural that they should make an outcry now that some tariff reductions are taking place. At the same time, the disappointing results of the high tariff policy pursued by his Government must have been disheartening to the honorable member for Capricornia (Mr. Forde). We recall that the promises that its policy would immediately relieve unemployment, and lead to a great many overseas factories establishing branches in Australia, failed to materialize.

Mr Forde:

– Thirty-four concerns have established branch factories in Australia, and have given work to thousands.

Mr PERKINS:

– I give the honorable member all credit for his ambitions. Certainly, some factories did begin in Australia, and gave a little employment, but after his Government had been in office some months many of the factories in Sydney and elsewhere closed down, while others worked only half time. 1 remember, shortly after the defeat of the Bruce-Page Government, and the advent of its successor, meeting a gentleman at Manly who was interested in three factories. While he was sorry that the Bruce-Page Government had been defeated, he declared that the future was bright for manufacturers. A few months later, I asked him how his factories were getting on, and he told me that two had closed down, and the other was working half time.

Mr Forde:

– What sort of factories were they?

Mr PERKINS:

– Leather factories. The people turned against the Scullin Administration because of the great amount of unemployment that resulted from its policy. The Country party went to the poll on practically the same tariff policy as that supported by this Government. I shall not go into the details of the joint platform that was adopted, and which has been misrepresented during this debate. In the circumstances, it is somewhat strange that, ever since this Government assumed office, practically every speech made by a member of the Country party has been an attack on the Government regarding its action in connexion with wire netting, galvanized iron, and barbed, wire. One would think that farmers had barbed wire for breakfast, galvanized iron for dinner, and wire netting for tea. I and other honorable members on this side represent country constituencies, and we know that, while farmers are interested in those three items, they are also vitally concerned in a number of others.

This Government has been in office only five months, and it is carrying its policy into effect. Unlike the Scullin Ministry, which submitted items to the Tariff Board and then ignored the recommendations of that body, this Government is following the board’s recommendations. It is trying to confine itself to reports of recent origin, and has submitted many items to the board. The reports of the Tariff Board are the result of careful investigation by persons skilled in the taking and weighing of evidence, and this Government will give them careful consideration. If we were going to depart wildly from the board’s recommendations and increase tariffs, we might just as well abolish the board, and make the proposition purely a political one. When honorable members consider that the time of the Government has been principally devoted to a matter that is of far greater importance to the farmers than barbed wire - the deposition of the Lang Government - it must be admitted that we have not been unmindful of the best interests of the community.

Honorable members who examine the items in the schedule will realize that the Government has given a great deal of time to the subject. The Government realizes, too, that some honorable members have given the matter careful study. I particularly refer to the honorable member for Riverina (Mr. Nock), who has given the committee much information with regard to prices which will be read with interest when it appears in Hansard.

Practically everything has doubled in price during the past decade. Tram rides that once cost Id. now cost 2d., and the cost of newspapers has doubled, and railways fares have increased. Even wages have doubled. All of those increases cannot be attributed to the tariff. Economists have accounted for 400 reasons which, they say, are contributing causes to the present position. I shall deal with an outstanding reason - the war. The depression from which we are suffering is the aftermath of the war. History reveals that ten years after the Napoleonic wars, the world passed through the greatest depression it had known till then. A greater war occurred, and it is being followed by a still greater depression. I remember, shortly after the Great War had ended, meeting a gentleman in Sydney, who pointed out to me that, following previous wars, there had always been a depression, and he predicted that history would repeat itself; and that about 1930 the world would pass through the greatest depression in history. Many other things have been contributing causes. Our friends of the Country party have tried to show that the whole of the troubles of Australia are due to the tariff. Economists tell us that the world depression is aggravated, not by high tariffs in any one country, but by tariffs in all countries. One country tries to protect the oil industry, another the rubber industry and another - as Australia does - the cotton industry. Since the war, various countries have tried to help their own industries, and many of them hit on the plan adopted by the last Minister for Trade and Customs; they started closing the door against outside competition. This resulted in the fostering of industries, in many instances unnatural to the countries concerned, and there has been a general falling-off in world trade. Although a protective policy is necessary in Australia, we should not go in for protection run mad. Under the Pratten tariff, duties averaged IS per cent., and this was practically the highest tariff in the world, only the tariff of the United States of America, which averaged 19 per cent., being higher. If we could get back to the Pratten tariff now, we would be one of the low tariff countries. I remind honorable members that, though this Government is pledged to tariff reform, there is no need to proceed with undue haste. The tariff will be revised by degrees. We are expecting much from the Ottawa Conference, as a result of which it is hoped to obtain Empire-wide preference for our goods.

There is no doubt that our secondary industries have expanded enormously under protection. It is very instructive to visit some of our factories, and to see the number of persons employed there, and the quality and quantity of goods produced. Were it not for its secondary industries, Australia would be in a very serious plight at the present time. The honorable member for Swan (Mr. Gregory) wanted to know why Australia could not produce articles of as good quality and as cheap as those produced elsewhere. As a matter of fact, we do produce goods of a quality, equal to those produced overseas. Only a few years ago we were told that Australian-made clothing was inferior in quality, and fastidious people turned up their noses at it. Now, practically everything we wear is made in Australia.

The policy speech which the Prime Minister delivered before the last election clearly indicates that this Government is pledged to a policy of protection. When a ministry is formed, it may include in its ranks men whose views range all the way from high protection to almost freetrade; but I believe that the policy decided upon by this Government is such as to merit the unanimous support of all honorable members. When the items are before the committee, members of the Opposition will be found voting with the Government, and the only opponents of the tariff will be the members of the Country party. This Government is not on its defence in regard to the tariff.

We have only just assumed office, and we hope that we have a long term of office before us. I am confident that, when the time comes, the people will endorse our tariff policy.

Mr MCCLELLAND:
Wimmera

– I am surprised to find that the tariff schedule still includes a number of items on which the duty should be increased. Some honorable members who support the Government spoke of members of the Country party as representing only primary producers. The honorable member for Wentworth (Mr. E. J. Harrison) cast a few gibes at us on that score, and then devoted the greater part of his speech to proving the very case for which we stand. Members of the Country party claim to be just as truly representative of all interests in the community as are honorable members opposite. I listened with interest to the fine oration delivered by the Deputy Leader of the Opposition (Mr. Forde) in defence of’ the prohibitive tariff introduced by himself. From the way in which he praised himself, one could only conclude that he took to himself practically the whole credit for correcting Australia’s adverse trade balance. I have no wish to rob him of any comfort which he may derive from that belief, but 1 cannot refrain from pointing out thai our adverse trade balance would have been rectified whether a prohibitive tariff had been imposed or not, and that without any of the harmful effects which followed the imposition of the ridiculously high duties introduced by the last Government. The honorable member also referred to the wonderful home market which was furnished for our primary products by those engaged in secondary industries. Surely he must know just how much the home market is worth to our staple industries - wool and wheat. The price received for wheat and wool that goes into local consumption in Australia is not an Australian price based on local costs of production; it . is the world parity price, less the cost of marketing abroad.

Mr HUTCHIN:
DENISON, TASMANIA · UAP

– Does that apply to butter also?

Mr MCCLELLAND:

– That subject was dealt with effectively by the honorable member for Gippsland (Mr. Paterson). I was also impressed by the speech of the Leader of the Opposition .(Mr. Scullin). I used to have a great deal of sympathy- with the right honorable member because of the difficult task with which he was confronted when he was Prime Minister. In his attempt to rectify the adverse trade balance he made a special appeal to the farmers to grow more wheat. I do not know why he should have appealed to the wheat-growers any more than to any other section of the community. It seems strange that he did not appeal to those engaged in some of our secondary industries, because they could have produced goods for export in a shorter time than the farmers could provide wheat. I was one of those who listened to the right honorable member’s speech when he appealed to the. farmer; to produce more wheat for export, so that we might re-establish our credit overseas. Honorable members are no doubt aware that, in response to that appeal, the farmers of Australia produced 210,000,000 bushels of wheat, which was 50,000,000 bushels more than the previous record crop.

Mr Riordan:

– And that year England bought Russian wheat.

Mr MCCLELLAND:

– That did not make any difference to the price Australia received for her wheat. If England had not bought Russion wheat, it would probably have been sold in a market in which Australia could ordinarily get a better price for her wheat than she could get in England. After producing that record crop, the Australian growers found themselves on the wrong side of the ledger to the extent of £20,000,000. The additional wheat grown in that year, even at the low prices ruling, brought into this country £7,000,000 of new wealth. Later the farmers were given a bounty of £3,000,000.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Does not the honorable member think that a similar bounty should be paid this year?

Mr MCCLELLAND:

– There should be a bounty this year three times that of last year. If some such assistance is not given to the farmers, there will be little wheat produced in this country in the near future. I know that some honorable members object on principle to the payment of bounties. I am opposed to bounties generally, but let me remind honorable members that the protection which we are now proposing to give to secondary industries is the equivalent of bounty. The Deputy Leader of the Opposition (Mr. Forde) claimed that the prohibitive tariff introduced by him had been chiefly responsible for the adjustment of the trade balance. I contend that the primary industries, which have had to bear the burden of the protective tariff, were mainly responsible for bringing about the adjustment of the trade balance. Most countries have instituted tariffs, and that has been one of the big factors of the present uneconomic position of the world. One of the direct results of the prohibitive tariff in Australia was the loss of one of our best markets for wheat.

In 1925 France purchased about £6,000,000 worth of Australian wheat. When we prohibited the importation of French goods, that country placed on Australian wheat a duty double tha’ on wheat from any other country. Although we had a record crop, not one bushel of Australian wheat was sold to France.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Our wheat was sold elsewhere.

Mr MCCLELLAND:

– Certainly; but the fact remains that the prohibitive tariff which was designed to benefit Australia has had the effect, not only of increasing the cost of production in this country, but also of limiting our markets overseas.

Mr Forde:

– France is the fifth largest wheat-growing country in the world, and it has imposed a duty on wheat to protect its own industry.

Mr MCCLELLAND:

– France not only imposed a duty on wheat, but also paid a bounty of 2s. 6d. a bushel on all wheat exported. That shows that some countries are prepared to protect their national industries. In 1925 Italy purchased about £5,000,000 worth of Australian wheat; but, during the season when we produced our record crop, we were able to sell that country only 500,000 bushels. In our endeavour to afford additional protection to over-protected secondary industries, we are practically destroying the markets for the products of our primary industries, upon “which the whole of the community lives. I do not know of any better means of wrecking Australia than to carry to an extreme this policy of protecting already over-protected secondary industries. We have practically killed the goose that laid the golden egg. We have placed our secondary industries in the primary position and relegated our primary industries to the secondary position. In 1908, when our secondary industries were receiving a certain measure of protection, there were only eight items with a protection of 40 per cent, or over. At that time our national debt was about £200,000,000, our interest bill les? than £10,000,000, and our taxation bill £18,000,000. In 1927, which was the peak year of production. our national debt was £950,000,000. The tariff wall was rising all the time. Last year hundreds of additional tariff items were listed, some of them having a protection of 100 per cent. ; our national debt was about £1,200,000,000, our interest bill £60,000,000, and our taxation bill £100,000,000. Those commitments mopped up practically 40 per cent. or 50 per cent. of our total production. Since 1911, our national indebtedness has increased by £1,000,000,000. The borrowing policy of past governments was a considerable factor in the increase of the tariff, and the borrowing of money abroad made it comparatively easy for importers here to purchase goods overseas. Those goods, when landed here, competed with the products of our secondary industries. The more we borrowed the more goods we purchased. All the time there was a continual agitation for increased protection, until we arrived at the ridiculous position of the last year or so..

Early in the evening something was said about it being necessary for honorable members to have the interests of all sections of the community at heart. 1 take it that that is the case with this committee. But it seems to me that we have arrived at a stage at which we require to be protected against ourselves. We cannot borrow money abroad, and we have not the purchasing capacity that we had previously; consequently there will be less competition from imports. One of the factors of the high cost of production in this country has been our immensely high tariff wall. A reduction in production costs must take place before Australia can be placed on the road to prosperity, and to that end I shall support reductions rather than increases of duties affecting primary industries. Much has been said about the necessity for a scientific tariff, and, in that respect, frequent mention has been made of the Tariff Board. Another expert committee which was recently constituted has submitted a report which, we are given to understand, will be adopted by the Government. In that report, which was placed before the recent Premiers Conference in Melbourne, the committee stated -

The expansion of exports, not necessarily wool and wheat only, offers the best hope of revival.

Later, the report reads -

But in the absence of a growth in export activities the expansion in home industries is likely to be severely limited.

The next paragraph of the report reads -

Recovery therefore is almost wholly to be sought in an active export of Australian products such as wool, wheat, butter and metals, though it is likely that with some reductions in costs, other Australian industries may be able to contribute to this recovery by developing an export trade.

One reason why our secondary industries have not developed an export trade is that they have formed the habit of seeking additional assistance every time they get into slight difficulties. The honorable member for Denison (Mr. Hutchin) made some reference this afternoon to the efficiency of our primary industries. The fact is that our primary producers have been forced to become efficient because their products have had to compete on the world’s markets with those of other countries. The honorable member for Corangamite (Mr.Gibson) referred this afternoon to the efficiency of the dairying industry. In this connexion, I direct the attention of honorable members to a few facts in connexion with our sheep industry, which should make all Australians proud. They are as follow: -

  1. Australia produces more wool and better wool than any other nation.
  2. Australian sheep produce a greater weight of wool and a greater value of wool than those of any other nation.
  3. Australian sheep produce, on the average, twice the value of the average per head of the sheep of the rest of the world.
  4. Depasturing16 per cent. of the world’s sheep, Australia produces 27 per cent. of the world’s wool, and 32 per cent. of the value of the world’s wool clip.
  5. The Australian flock masters (over 80,000 ) have doubled the output of wool per head during the past 40 years.
  6. The Australian clip is better prepared and marketed than the clip of any other nation.
  7. Australian wool is bought at the Australian open auction sales by wool users from every wool manufacturing country.
  8. There are only 3,700 flocks of over5,000 head in Australia. The average size of the Australian flocks is 1,300 head.
  9. For the year ending 30th June, Australia will have produced a record clip of over 3,000,000 bales, and the coming clip will probably reach 3,100,000 to 3,200,000 bales, average weight 310 lb.

The wheat industry of this country has also been consistently improved, and is to-day a most efficient industry. If our secondary industries were similarly efficient, we should have a big export trade in secondary manufactures.

The report of the expert committee which was placed before the recent Premiers Conference dealt with our customs tariff in these words -

It is apparent from the reports of the Tariff Board that there are considerable opportunities for reduced costs in secondary industries generally. These are to be found on the side of organization as well as of labour. The opportunities are unlikely to be vigorously exploited except under the pressure of a downward revision of the tariff.

In these circumstances, I trust that this schedule is the first of a number which will effect a progressive reduction in many of the existing high tariff duties.

Sir LITTLETON GROOM:
Darling Downs

– I believe that the general feeling of all honorable members is that in dealing with the tariff, first consideration should be given to those who are engaged in our great primary industries. There cannot be any difference of opinion on that subject, though we in committee differ in regard to methods of application. The primary industries should receive consideration first. The honorable member for Denison (Mr. Hutchin) struck the right note when he said that the tariff was one of the means by which Australia should develop her vast territory. Whether we like it or not, we shall have to maintain a high tariff. In 1901, when the first tariff schedule was introduced, three-quarters of the net revenue from customs and excise duties had to be returned to the States. It was then realized by the Parliament that a tariff would have to be imposed for two purposes: first, to provide revenue; and, secondly, to protect Australian industries. Australia at that time had a comparatively small population, with many big problems to face. We were then laying the foundation for our national life, and it was generally recognized that the fiscal policy which we were considering would be the policy of the country for many years to come. A strong national sentiment prevailed in the Commonwealth at that time, and it expressed itself in the tariff that was agreed to. Our population in 1903 was only 3,765,339, and with that small number of people the Commonwealth had to hold this outlying post of the Empire in the Pacific, and to begin to develop it as one corporate whole along lines which would make it a great nation. It was realized that to do this it was necessary to develop, not only primary industries, but also important secondary industries, and the tariff was framed with that object. It is true that the Government of the clay was hampered through having to provide a large proportion of revenue for the States from the Customs. I well remember Mr. Kingston emphasizing the fact that although some of the items on the tariff were for revenue-producing purposes, others were definitely protective. He said that he had to formulate a tariff policy which would have regard to the needs of important industries that were essential to the welfare of the nation. The States which were parties to the Federation adopted an Australian outlook. At that time practically the whole population of the continent was contained within a triangle bounded by lines connecting Sydney, Melbourne, and Adelaide. As a matter of fact the great bulk of our population is still to be found within that area. But Australia had also to face the problem of developing the outlying portions of the continent, including the great north-west of Western Australia, the Northern Territory and Queensland. It was realized that if this continent was to be held as a British possession it must be effectively occupied, and its outlying territories must be effectively settled for the purpose of producing wealth for mankind. That ideal, which animated the first Commonwealth Parliament, must be the ideal of this Parliament if it is to be truly national in sentiment. When Queensland, with her great sub-tropical and tropical areas, became a party to the federation, her’ citizens felt perfectly satisfied that the rest of Australia would deal with her according to the British standard of fairplay. She felt that she would receive justice from the other States. As a Queenslander I am proud to say that Queensland has never had any reason to complain seriously in that respect. The statesmen of Australia have always considered our great industries, not in regard to their geographical location, but in regard to their usefulness in the development of the country. The representatives from Queensland, in common with those of the other States, have adopted that attitude. I speak feelingly on the subject, for I was the Minister in charge of the great water conservation works on the river Murray when they were first put in hand. I became deeply interested in the irrigation and locking projects of that great river. Queensland members gladly supported the measure for providing the £1,000,000 required as the Commonwealth’s quota for this work, and later on supported the amended agreement under which a quarter of the whole money necessary for the work was provided. In the Murray Valley a very valuable dried fruits industry has been developed. A protective policy has been needed to ensure the continued progress of that industry. The dried fruits produced along the Murray have to enter into competition with the products of Mediterranean countries, grown under cheap labour conditions. It is for that reason that Parliament has imposed a duty of 6d. per lb. on currants. This is, admittedly, a prohibitive duty, designed to protect the Australian dried fruits industry.

In following out the policy which was laid down at the beginning of the Federation, of building up great national industries, regard had to be paid to the conditions that prevail in Australia. The products of cheap labour countries could not have free admission into Australia to enter into competition with Australian products. Any alteration of the tariff should be made with that principlein mind. Australia still clings to the ideal of a reasonable standard of living for the people engaged in her various industries. She desires to preserve for her work-people such a reasonable standard as her capacity will allow her to maintain. It may be affirmed that the national policy then evolved has, on the whole, been successful. The. population of Australia has grown from 3,765,339 in, 1903 to 6,494,563 in 1932; it has nearly doubled during that period. On the Queensland coast a large number of prosperous towns have sprung up, and a considerable population has been settled both on the coastal belt and inland. The successful development that has already taken place in Queensland has been of great assistance to the rest of Australia. It has provided a fine market for the products of many of the secondary industries carried on in the southern States, and the shipping trade along the Queensland coast is considerable. The added value given to the production of the manufacturing indus- tries of the Commonwealth has increased from £31,172,000 in 1906 to £156,364,432 in 1930. Marked progress is noted in regard to the woollen industry, the boor, and shoe manufacturing industry and other industries natural to this country. Let me quote the main conclusions of the committee of economic inquiry on the Australian tariff -

The evidence available docs not support the contention that Australia would have maintained its present population at a higher standard of living under freetrade. . . . The advantage of protection is in the maintenance of a larger population than wouldhave been expected at the same standard of living without the protective tariff. It is not an advantage to every part of the population, nor has it produced the maximum amount of income per head. But, given the basic Australian objective of seeking the largest white population at the highest standard of living, we consider that the protective tariff has been an effective means of securing it. The practical conclusion is that, having established this population, it would he disastrous to abandon the policy which has made it possible.

That is a considered opinion as to the result of Australia’s fiscal policy during the last 30 years. It shows that the ideals with which the Australian nation started are being realized, and it gives sufficient justification for continuing upon these lines of legislation.

Except during the last Parliament, I have been a member of this House when past tariffs have been considered. The general line of policy which I adopted, and which was adopted also by many others, was that the articles subjected to customs taxation were divided practically into three classes.We have to raise a large amount of revenue, and no government could seriously enter- tain a proposal for a freetrade tariff. The amount of revenue that it is necessary for us to collect to enable national obligations to be met would make that impossible. Under the Financial Agreements, this Parliament must raise £7,584,912 annually in lieu of the old per capita grant to the States, and that sum has to be obtained by means of customs and excise duties. Large sinking fund payments have to be made, and an enormous interest bill has to be met. Therefore, on a certain class of articles we must impose purely revenue duties. Then there are the articles required for the purposes of primary and secondary production, and if these cannot reasonably be produced in Australia, they should be placed on the free list, otherwise we are- taxing production. The third class comprises those articles which can be produced in Australia, and those that can be made here from our own raw material. These should be made the subject of customs taxation for protective purposes. Those lines have been followed generally in the framing of our tariffs. The policy laid down by the late, Mr. Pratten, when he was Minister for Trade and Customs and members of the Country party were in the Ministry, was expressed by him in these words -

The purpose of the tariff now placed before honorable members is a direct one, namely, to protect local industries, and to revise revenue duties in order to give relief from taxation.

He also believed that revenue tariffs should not be imposed on articles required in production. It has been indicated that there .is to be a complete revision of the tariff, and it seems to me that that work ought to be done on definite lines. “We should not act on the lines adopted by certain members who were described as geographical protectionists. I shall support all revenue duties which are necessary to provide the money required to carry on the government of the country, and I would free from the tariff those articles which are needed in primary and secondary production, if they are not produced in Australia, and cannot be produced here tinder reasonable conditions. I shall continue to support the policy that I have followed throughout my political career. I believe in giving reasonable protection to those primary and secondary industries which are natural to this country and can fairly be expected to prosper in this country.

I again draw attention to the need for the development of this- continent. In glancing at the map of this country, one sees vast areas to the north of Sydney that await further development. Complaint is made against the growth of the cities at the expense of the rural districts, and it is alleged that this is due to the operation of the tariff, . but that is not entirely the reason for it. To a great extent the reason is that State governments have not developed closer settlement policies sufficiently, or as rapidly as they are required. The strong demand there is for land was indicated in Queensland a short time ago when there was a large number of applicants for the blocks thrown open for settlement. They were not speculators, but-mostly farmers’ sons, willing to develop the land. Hundreds of young Australians to-day are anxious to settle in the country ifr land is made available to them, as it should be, on easy terms. In a huge State such as Queensland, where a comparatively small area of land has been alienated from the Crown, there should be ample scope for closer settlement. Immediately the tobacco lands were thrown open in Worth Queensland, 600 farms were established in the Mareeba district. In the Texas district, also, there has been an eager inquiry for private blocks that were available. Honorable members will realize that although Queensland is mainly a sub-tropical State, large areas there have a temperate climate. Surely it would be of advantage to Australia as a whole if these northern areas were fully developed. Unfortunately, the1 Govern-, ment brought down a proposal in connexion with the cotton industry which had an injurious effect upon it. It led to the cancellation of a five-years agreement upon which that industry had been stabilized. About 5,000 settlers have been growing cotton this season on about 60,000 acres. A great number of these growers are located in a particular area which the Queensland Government threw open some time ago. In one district it made about 3,000,000 acres available for settlement, and therefore the industry is of considerable importance. I am glad to know that the Government has relented, and has been able to enter into an arrangement with the Cotton Board for an alteration of the tariff proposed as a result of which this industry will be given an opportunity to expand. There are enormous areas in Queensland in which cotton could be grown successfully. This industry is natural to Queensland, because the climate and the soil are admirably adapted to the production of cotton. Steps are being taken gradually to increase the efficiency of the industry. It is ideal from an Australian point of view, because upon it can be built the secondary industry of cotton spinning, which is being carried on successfully to-day. Australian cotton goods of high quality are now being manufactured.

I shall not refer at this stage to the tobacco industry. That will, no doubt, be discussed later, but it may be mentioned as another of those industries which are natural to this country, and on which a proper protective duty should be imposed. Those farmers who are carrying on these industries with white labour under Australian conditions are entitled to adequate protection. They are making a valuable contribution to the effective occupation and development of the Commonwealth. Other tropical industries could be developed on similar lines, and it would be to the interest of Australia generally if those honorable members who have not visited the northern districts would do so, and obtain firsthand information upon which to base their judgment. Early in the history of the Commonwealth Parliament federal members visited the cane-growing areas, and learned from personal observation something of the development already achieved and the conditions under which the sugar industry was working. It i3 due to the nation that this Parliament should similarly inform itself. If the Commonwealth is to adhere to the White Australia ideal we must adopt a policy which will make it practicable and secure. We have legislated on those lines up to date. The secondary industries in Melbourne and Sydney have prospered; in fact no part of Australia has advanced more under the protectionist policy than has Sydney. The great national advantage of this policy was revealed during the Great War, when Australia was able to send overseas about 400,000 men, with equipment made to a great extent in our own factories by Australians from raw materials produced in the Commonwealth. Criticism has been made against the iron and steel industry, but the strength of every great civilized country is based to a great extent on a prosperous steel industry, which provides many of the requirements of other industries. This Parliament is acting wisely in developing the production of iron and steel in Australia and manufactures therefrom. We are still at the beginning of our national life, and the future development of this country will depend on what we do to-day. We must take a broad national view. Australia cannot be developed by men sitting in offices and working out theoretical formulae. As practical men in charge of the nation we must endeavour to advance and expand this country so that it will be a source of strength to the British Empire as it was during the Great War. With practical development scientific advancement must go hand in hand. From the beginning of the Federation the need for developing all those scientific activities which would enable us to protect our animal and plant life from disease, and improve the quality of both crops and stock was fully recognized. Science is being applied to various industries, both primary and secondary. For the allegation made during this debate that many of our industries are inefficient, there is no justification. At one time men declared that dairying could not be successfully carried on in Queensland; and nobody dreamed that this industry could be established in the hot northern districts. But by the application of science and invention, Queensland has become a very large exporter of butter and the largest Australian producer of cheese. Continual progress has been made from year to year in the erection of factories, and in improving machinery and the methods of manufacture. The greatest keenness is displayed by the men engaged in the factories, and some of them attend Gatton College for scientific training to increase their efficiency. A similar story might be told of wheat- growing on the Darling Downs, and other industries. The special committee which inquired into the sugar industry reported that from each acre harvested 1.88 tons of raw sugar was produced in 1920, whereas in 1929 the yield was 2.41 tons, whilst the yield per acre has doubled in the last 30 years.

Mr Prowse:

– So has the price.

Sir LITTLETON GROOM:

– The report of that committee on the sugar agreement contained a comparison of the retail prices and the basic wage in Melbourne in the years 1911 and 1930, which showed that the percentage increases in that period were: sugar, 66.9; butter, 21.9; beef, 92.9; rump steak, 130.4; mutton, leg, 86.8; chops, 92.3; bread, 67.1; jam, 73.2; and milk, 66.7 ; and the basic wage 71.4. In the light of those figures there is no justification for the complaint that the price of sugar has been advanced disproportionately to the increases in the prices of other commodities. Not only has the sugar industry supplied the Australian public at reasonable prices, but it has advanced the ideal of closer settlement, created a large number of prosperous towns in the north, and enlarged the market for the industries in the southern States.

I propose to deal briefly with the canary seed industry, in which are engaged 300 farmers who have given seasonal employment to as many as 1,500 persons in a good season. Queensland is the only country in the British Empire that is producing this commodity, which had been imported from Argentina and Turkey. The growers applied to the Tariff Board for an increase of duty, and made out a very good case. The Tariff Board seemed to be sympathetic. Upon the Canary Seed Board agreeing to make supplies available at all Australian ports at £32 10s. a ton, a prohibition upon imports was imposed. The prohibition has been lifted, and now the old duty applies. The growers asked for a specific duty, and I understand that the board’s report is now before the Minister. The growing of canary seed is an important side line to 300 farmers on the Darling Downs. This plant requires a particular climate and soil, but the Darling Downs district is particularly well suited for its cultiva tion. One importer in Melbourne gave evidence very strongly against the protection of this industry, declaring, contrary to the facts, that the Queensland climate was unsuitable and the seed inferior; but Mr. Yates, the seed merchant of Sydney, testified that Queensland produced seed of a fair average quality: Australia’s annual requirement is 1,500 tons, and had last season not been abnormal, the Queensland growers would have supplied that quantity, and had a large surplus. The men are trying to add annually to Australian production some £50,000 worth of seed, and are entitled to the sympathy of this House. I urge the Minister to accede at once to the request of the Canary Seed Board for an increase of duty.

In regard to the tariff policy generally I have always been a nationalist. From the day I entered this Parliament in 1901 I have not changed in that respect. I have supported the building up of Australian industries, both primary and secondary, and have realized the importance of primary production and the doing of everything reasonably possible to enable the rural industries to expand simultaneously with the balanced development of the secondary industries. I have always contended that in regard to specific duties Parliament should be advised by an expert body. The first Federal Parliament suffered much through the absence of machinery for the collection of statistics and the sifting of evidence, and members were to some extent at the mercy of lobbyists on behalf of manufacturers and importers. That deficiency was rectified to some extent by the functioning of the Interstate Commission. Also a royal commission inquired into the tariff and supplied Parliament with sifted information; but I believe that an inquiry by a tariff board is the most’ effective method. It was never intended that the Tariff Board should supersede Parliament. The value of the Board is that it can present to Parliament a report based upon evidence that it has sifted and weighed. We may not always agree to its recommendations. It cannot be expected that such a body would be so perfect that its reports would meet with unanimous acceptance by honorable members, who come from all parts of Australia. The Tariff Board is an exceedingly useful body, and its reports will be a guide to me when I am making up my mind on individual items. It is wrong to say, as the Leader of the Country party did, that it is for the Tariff Board to determine these issues. It is for the Tariff Board to recommend, and for Parliament , to determine. I accept the words that were contained in the speech of the Prime Minister, that the Government is carrying out the protectionist policy of the old National and Liberal parties.

I sympathize with the ex-Prime Minister (Mr. Scullin). His Government found itself in a desperate position. It was necessary to take steps to balance our trade, and high duties had to be imposed. I commend the honorable gentleman for his efforts to do this, and for his efforts to secure the production in Australia of goods that could be properly manufactured here. Conditions are now improving, and a revision of duties is necessary. On those lines I propose to assist the Government.

Mr HOLLOWAY:
Melbourne Ports

– The debate on the tariff has been useful, as many honorable members have expressed their opinions as to what the fiscal policy of the country should be. I desire to break new ground. The opinions held by the Country party, and by all of us, should be further considered in the light of changed circumstances, and of experience. The arguments used by the honorable member forForrest (Mr. Prowse), and the honorable member for Swan (Mr. Gregory) are exactly the same as have been used by them throughout the past twenty years. We should not adhere to old ideas simply because they are old, nor should we adopt new ideas merely because they are new. The speech of the honorable member for Riverina (Mr. Nock) indicated some scepticism, so far as he is concerned. It was a fair and broad examination of the whole situation, and the honorable member was the first representative of the Country party whom [ have heard to definitely say that he does not believe that lower wages and lower standards will improve the position of the primary producers. That was a heartening note. If we could all express ourselves as to the efficacy of the old conditions, we might make things better for the community generally.

My endeavour is to demonstrate that Australia has not fared so badly as many other big producing countries during the past two years. The value and volume of our exports have increased during that period in greater ratio than those of othercountries, while the value of our imports has fallen to a larger extent. That and the fact that all other countries have experienced a greater increase in unemployment during 1931 than in 1930 prove that the contentions of the honorable member for Forrest, that high wages are responsible, are not sound.

Mr Prowse:

– Have not high costs made it more difficult for the primary producers to carry on?

Mr HOLLOWAY:

-That point was expressed also by the honorable member for Wentworth (Mr. E. J. Harrison). He argued that high tariff means high wages, and high wages mean high costs, so making it more difficult for our primary producers to compete with other countries. Unfortunately for the honorable member the economic facts disclosed as a result of international trade during the past three years contradict those claims. During that period wages in Australia have been lower than at any other time during the past two decades, while this year they are lower than they have been since federation.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member should be fair, and mention the extraordinary unemployment figures resulting from the depression.

Mr HOLLOWAY:

– I am pointing out that in every country there has been a greater ratio of unemployment than in Australia. Our real wages are lower than they have been since 1928, costs are lower, and the volume of last season’s crop was greater, yet our primary producers cannot make ends meet. That proves to me that the reason why our primary producers have not been successful in previous years is not because wages and costs were high, but because there was no profitable market for their products.

The report of economic experts which I have before me states that there are from 60,000,000 to 70,000,000 persons deprived of the means of existence, because of their own inactivity, and that of those who are dependent upon them. That is the aggregate of the unemployed in the big countries of the world. Although costs are lower, and crop3 have been successful, there is no demand, except at reduced prices, for the goods that Australia, Argentine, Siberia, Canada and other countries have to market. Because of that information we should re-examine our old theories. Why should we go on arguing in the same old way when facts disprove our contentions? These scientists have considered prices and costs. They have taken year by year, and decade by decade, and examined every country’s economic circumstances. But many in this Parliament content themselves with repeating the same old arguments and the same old slogans. We should examine this matter from a non-party point of view. I am consciously a protective protectionist. I do not want the tariff to be fixed just high enough to provide revenue, and still let goods come in. I want an honest tariff to prevent the importation of goods that we can produce economically ourselves. I desire to examine this matter with the representatives of the primary producers, and the representatives of other sections of the community j in an endeavour to model a tariff that will help one section without harming others. That was the idea that ran through the ‘whole speech of the honorable member for Wimmera (Mr. McClelland). He did not argue that there should be a reduction of wages. After five years of deflation, wages have been brought down so much that trade is absolutely stagnant.

The report of the International Labour office at Geneva states that the real cause of the depression is the reluctance of people to buy. Lack of confidence has disorganized trade. Every one is holding off until pi-ices fall lower still, believing that if they buy when prices are at bedrock they will derive a commercial advantage over their competitors. On the strength of evidence collected all over the world, it is definitely stated that the world’s economic troubles are not due to tariffs. To quote an example, the honorable member for Forrest (Mr. Prowse) sent his wheat crop overseas for sale this year. The quality was as good as ever, the cost of production was lower than it used to be in past years, and his farming’ methods are as efficient as ever they were; yet the price he received was almost the lowest on record. The reason, of course, is that the world market has become glutted and disorganized, and that is why the primary producers are not receiving the return they are entitled to.

Mr Dein:

– What control have we in Australia over world prices?

Mr HOLLOWAY:

– We haven’t any.

Mr Dein:

– Then we should seek to control those factors which are under our command.

Mr HOLLOWAY:

– We have been trying to do that for years, but it has not bettered our position. The honorable member for Gippsland (Mr. Paterson) has frequently complained of the price of agricultural machinery. I agree that the price is too high. I have taken some interest in. this matter, and have studied the manufacture of agricultural machinery in this and in other countries. I have come to the conclusion, which is supported by the opinion of those who are in a position to know, that there are no agricultural manufacturing works in the world more efficient than the Sunshine works in Victoria. There are bigger factories, but none- more efficient. I believe, however, that the Sunshine company is exploiting the primary producers by charging too much for its product, but that is not the fault of the tariff. The importers who used to sell American machinery charged more for it than the local manufacturers, but lately the Australian .manufacturers have put their heads together, and agreed that they will jointly exploit the public. Until we can control prices, the consumers will not get a fair deal. The tariff report dealing with agricultural machinery does not bear out the statement that the high prices charged in Australia are due to the tariff.

Mr Collins:

– The manufacturers are becoming millionaires at the expense of the primary producers.

Mr HOLLOWAY:

– They are, but the tariff is not to blame for that.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The tariff enables them to do it.

Mr HOLLOWAY:

– I can remember something of the conditions which prevailed in primary industries when Victoria was practically a freetrade State, and long before the Sunshine Harvester Company became a force to be reckoned with. Public opinion became aroused at the sweating of labour in primary industries. Meetings were held, and resolutions passed condemning the practice of working children long hours so that they could not attend school. That was before the imposition of a protective- tariff, yet our friends of Western Australia would have us return to those conditions. I am certain that conditions in primary industries since protection has been the policy of Australia are better than they used to be in freetrade times. That is not to say that the tariff may not have run to seed in some directions, or that things are perfect’ now.

Some of the charges made against the last Government’s tariff policy are unfair when we recall that it was an emergency tariff, designed to meet extraordinary conditions. The prohibitions, surcharges, &c, were meant to be merely temporary measures. I thought that they would have been abolished even before now. I do not blame the present Government for trying to remodel the tariff, provided the committee is afforded an opportunity of discussing its. proposals. I agree with the honorable member for Denison (Mr. Hutchin) that what we want is a balanced tariff. The primary producers of Australia benefit from the protection of Australian industries. After all, the home market is of value to the primary producers. At the present time, every country in the world is looking inward for a market, instead of outward. Most of the big producing countries are coming to the conclusion that the international market has been exploited almost to the limit, and they are building what has been described as a brick wall of protection round their own markets. Australia cannot stand alone in this regard. The development of a big home market in Australia is just as valuable to the producers of this country as the home market is to the producers in the United States of America.

Mr Thorby:

– Will the honorable member agree that it is unfair for the Australian consumer to expect to buy primary produce at world- parity prices?

Mr HOLLOWAY:

– Yes. I am prepared to go so far as to say that. I believe that we should buy Australian products in Australia at Australian prices. For the most part, we are doing that now, and we are not complaining. At the presen time, the primary producers constitute the only section of the community which is benefiting from the exchange rate. The Government could save itself millions of pounds if it induced the Commonwealth Bank to bring about a reduction in the exchange rate, but neither this Government nor the last one desired to do this. Most of us are content to allow the exchange rate to remain as it is, because the primary producers need the advantage they derive from it. We cannot deny, however, that the taxpayers, as a whole, are paying a- little more to confer this benefit on the primary producers. Some of - the representatives of the primary producers have not expressed much appreciation during the last few years of the consideration which other sections of the community have shown them during these difficult times. I stand, first of all, I suppose, for the secondary industries, not in any biased or parochial spirit, but because I am better acquainted with conditions obtaining in. them. I know that secondary industries cannot prosper unless the primary industries are also thriving. The best thing we can do for the primary producers is to keep at a high level the purchasing power of the workers. The home market provided by the mechanics and workers in the cities is the best market which the primary producers can have. If the wishes of the conservative representatives of the primary producers were given effect, the home market would shrink almost to disappearing point. They think only in wool and wheat, but there are other primary products to be considered. The products of Gippsland, for instance, with the exception of butter, are consumed almost wholly in Australia. We have to consider the producers of those commodities. How can we, in Australia, consume nearly 100 per cent. of our products, with the exception of wool and wheat, if we reduce the level of our local market in order to bring about lower wages and costs which some primary producers seem to think would make it easier for them to compete successfully in the markets of the world. Even under present conditions, they cannot compete successfully overseas. We must not forget that if we reduce costs in Australia, other countries whose costs are lower than ours will also reduce theirs. This is a downward vicious circle. Honorable members have complained of an upward vicious circle in this country, but strange to say, there is now an international downward vicious circle. It is of little use to lower the standard of living in Australia. When I was in Geneva at the Labour convention, I was asked to speak through an interpreter at several small conferences at the International Club. At the request of the delegates there, I dealt with the standard of living and the basic wage in Australia. I was asked why this country did not insist on giving legislative effect to the resolutions carried at the conference, and I explained that we had not done so, not because we were selfish and did not wish to help the people of backward countries, but because we had in Australia industrial and arbitration laws which transcended all resolutions carried at the conference. I was told that that was a selfish attitude to adopt, and that the delegates had expected Australia, as an advanced country, to adopt their resolutions so that they could hold up Australia as an example to the backward countries. I point out that it is our duty to lift the standards of the backward countries. The more we lift their standards the easier it will be for us to compete with them, and to improve our standards. It is for that reason that we attend these international conferences. We cannot expect to improve our standards unless the standards of other countries are also lifted. If the conditions of other countries were something like our own, our primary and secondary producers would have more opportunity to compete successfully with them in the markets of the world. We should be prepared sometimes to leave the beaten track. We have tried freetrade in this country and it proved to be a failure.

Mr McBride:

– We do not want freetrade.

Mr HOLLOWAY:

– No one wants it. Our fiscal policy should be so balanced as to enable us to manufacture our own requirements as far as it is possible to do so.

Mr Stacey:

– The Scullin Government, in framing its tariff policy, did not miss many items.

Mr HOLLOWAY:

– That was a temporary emergency measure designed to adjust the balance of trade. It was never intended that it should be permanent.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Deputy Leader of the Opposition has strenuously defended that policy.

Mr HOLLOWAY:

– He defended it for what it had achieved. The Tariff Board is composed of honorable experienced and intellectual men. The officers of the Customs Department faithfully and honestly carry out their duties. The function of the Tariff Board is to call evidence and to submit it in tabulated form to the Government. This Parliament should have the final say in respect of any alterations to the tariff. That was the objective of the Scullin Government. I have obtained figures showing how the trade of Australia compares with that of other countries. The value of exports in 1931, as compared with 1930, fell in Australia by 6.8 per cent.; in Austria, 28.8 per cent. ; in Belgium, 11.7 per cent. ; in Canada, 32 per cent.; in Czechoslovakia, 25.3 per cent.; in Denmark, 23 per cent.; in France, 27.9 per cent.; in Germany, 18.2 per cent.; and in Great Britain, 31.7 per cent. The value of exports fell in Australia to less extent than in any other country in the world. The value of imports in 1931, as compared with 1930, fell in Australia by 55.8 per cent., which is the greatest falling off in any country in the world.

Mr White:

– We had a good season in that year.

Mr HOLLOWAY:

– We have to take everything into consideration. The fall in the value of imports is the result of our abnormal tariff policy, which, as I have already explained, was a temporary expedient, and never intended to be permanent, but was absolutely necessary to balance our international trade balance. Extraordinary conditions are operating in every country. The rates of wages and costs operating during the last two years are not responsible for the position of the primary producers to-day. “When the Arbitration Court reduced the shearing rates last year, I was told by large pastoralists that the reduction did not matter one iota to them, because it was so infinitesimal. Having ascertained that the standard of wages and living in Australia is not the real reason for the position in which Australia finds itself, we should try to put our finger on the real cause, so that we may help one another.

Mr SCHOLFIELD:
“Wannon

– I listened with interest to the informative speech of the honorable member for Melbourne Ports (Mr. Holloway), although I do not entirely agree with him. “What I have to say may shed some light on the subject of tariff alterations. The honorable member for Martin (Mr. Holman), in quoting costs affecting primary producers, concentrated mainly on galvanized iron and wire. He was quite right in saying that those articles do. not add much to the costs of the primary producer. They are not taken into consideration in arriving at his cost of living, because there is no necessity to make frequent purchases of them. There are many other things to consider, such as wage3, machinery, storage bills, and freights, the cost of which is much higher than that of galvanized iron, wire, or other such articles which are not used frequently. The Country party, in attacking the tariff, is working on right lines, but using wrong methods. In the framing of tariffs every section of the community should be considered. The considerable falling off in the purchasing power of the community has been brought about by the low prices paid for our exports. As the primary producer has to buy local goods, the prices of which are kept at a fairly high level, mainly because of the tariff, it must follow - despite what the honorable member for Melbourne Ports has said - that he cannot purchase those goods in any quantity and carry on atn profit. The low prices ruling for our exports ]lave naturally diminished the purchasing power within Australia.. The point I am trying to make is that, as the money that we receive for the sale of our primary products will” not provide the purchasing . power to which the honorable member for Melbourne Ports (Mr. Holloway) has referred, we should try to get values down inside Australia so that it will purchase more. “World parity prices for our primary products should bring in sufficient money to allow our people to buy our locally mam.rfa.ctu red goods. I am in favour of a scientifically balanced tariff. The word “ scientific “ has been ridiculed this evening, but if we follow the recommendations of the Tariff Board we shall not go far wrong. If our tariff were scientifically balanced, our secondary industries could be put on a basis which would permit them to engage in an export trade. Production costs rose to a high level in Australia, and living costs followed them, during a period of unprecedently high prices for our primary products.; but we have now to make a readjustment, for the farmer has no option but to accept the price offered for his goods on the world’s market. This fact should, in itself, be. sufficient to bring about a re-adjustment of the relations between the different classes of the community. It is probable that conditions on the other side of the world would be reflected in Australia if we had a moderate and well balanced tariff in operation. The honorable member for Melbourne Ports suggested that the cost of our goods is not too high. Some people have sufficient money to pay these high prices; but they are not the primary producers, who are being carried at present by business firms and by the banks.

It has been freely admitted this evening that our primary industries are of great value to Australia. If this is so, every step should be taken to assist them.. The most effective step that we can take is to reduce our tariff imposts to a level which will enable us to compete on the markets of the world. I am not in favour of drastic tariff reductions, but there should be a reduction to the point which will allow us to absorb our unemployed in our secondary and pri mary industries. I believe that we have many uneconomic industries in Australia. About 30 firms are manufacturing machinery, whereas six firms could do it. With so many firms in this line of business, overhead cost3 are very much higher than they need be, and the primary industries are paying these extra overhead costs. Unless we can restore business to an economic basis, our primary industries will be crushed. If there is any other way than the reduction of duties to restore industry to a proper basis, I shall be glad to learn of it; but, in my opinion, the Government is proceeding along right lines. I should nol like to see a policy of wholesale tariff reduction, but there should be progressive reductions to enable the primary producers to enjoy a fair share of the wealth of the country. If the reductions are made progressively, and not drastically, industry will have a fair opportunity to re-adjust itself.

Mr MCNICOLL:
Werriwa

– i appreciated the excellent speech of the honorable member for Melbourne Ports (Mr. Holloway). I have heard the honorable gentleman on three occasions, and each utterance has been notable for the voicing of honest opinions clearly and thoughtfully. The honorable gentleman’s speech this evening pleased me, too, because it was in accord with my own views. I heartily endorse the suggestion that tariff matters should be divorced from party political considerations-, and dealt with in the best interests of the whole community. As a new member, I feel that I have an advantage over those here who were members of previous Parliaments, for I cannot be confronted with the ghostly, and sometimes ghastly, memories of statements made in other years, and shrouded in the pages of Hansard. I am surprised that honorable members who have been in politics for years do not recognize the value pf Hansard to their political opponents. If they did, they would probably not talk so much or so frequently. Some bitterness and a good deal of recrimination has been indulged in during this debate. The Minister for Trade and Customs (Mr. Gullett) and the Minister for the Interior (Mr. Parkhill) have [Ki] both been reminded of statements made by them during the last tariff discussion: It has been said that the members of the Country party are freetraders. I am not a freetrader, but a protectionist.

Mr Hutchin:

– The honorable member is not a member of the Country party.

Mr McNICOLL:

– I am proud to belong to the Country party. The speeches delivered during this debate by members of the Country party have shown conclusively that it is not a freetrade party. We believe in reasonable protection, and think that the tariff should be revised along reasonable lines. The honorable member for Martin (Mr. Holman) spoke of the foolish consistency which is the bugbear of small minds. I think Emerson made the original remark along these lines. According to a press report the Minister for Trade and Customs, in referring to the attitude of the right honorable member for Cowper (Dr. Earle Page) to the tobacco duties, expressed the hope that he would not again hear that right honorable member speak in favour of a reduction of duties. I can only hope that the Minister was misreported.

Mr Gullett:

– Not at all.

Mr MCNICOLL:

– The fact that an honorable member has argued against a reduction of the duty on a specific item should not be taken to mean that he is against the reduction of all duties, or vice versa. Every case should be treated on its merits. The honorable member for Hume (Mr. Collins) referred to the manufacture of hair cloth. A reduction of duty is proposed in connexion with that item. There is a hair cloth factory in Goulburn, at which an excellent material is produced. I have made close inquiries into this industry, and while I cannot say that the old duty was not too high, I certainly think that the reduction now proposed is not warranted at the moment, even though the Tariff Board declares otherwise. I do not think that the credo of the Minister should be, “ I believe in the Tariff Board report.” He should not blindly follow the board’s recommendations. If this small local industry is not protected sufficiently to maintain its operations a number of persons will be put. out of work. The amount of revenue involved in this connexion is infinitesimal. In any case, I am given to understand that the conditions have altered since the Tariff Board submitted its report to the Government, and that there is justification for requesting another inquiry before the new duty is approved.

Frequent reference has been made during this debate to the relative prices of primary and manufactured goods. The report of the statisticians, which is probably more reliable than a report of politicians would be, shows that, taking 100 as the basis in 1911, farm products had increased in price by 1931 to 118, or a rise of 18 per cent., while manufactured goods had risen to 200, a rise of 100 per cent. Those figures show the great disparity between the prices of primary products and manufactured goods at present. The honorable member for Balaclava (Mr. White) made a quotation from an excellent report by economists, to show that without our protective tariff this country could not have supported its present population and maintained the standard of living which is now enjoyed. I quite agree with that statement, but I remind the honorable member that Satan can cite scripture for his own purpose. In this case the purpose of the honorable member was to support the policy of protection. I propose to read to the committee the following statements by the same authority as that quoted by the honorable member, and to -begin where he left off : -

Some applications and extensions of protection have been wasteful, and cost more than the benefits gained.

Extreme applications of the tariff have undoubtedly been a cause of net loss. Further extensions may involve a more than proportionately increased loss.

The final effect is to raise the general price levels by 10 per cent, above prices with a purely revenue tariff.

The cost of the tariff becomes i> cause of its extension.

The benefits and costs of the tariff do not march together. As the tariff grows the costs overtake the benefits, because the benefits have natural limits, while the costs have not.

The tariff falls with the greatest weight on the export industries.

It is significant that the considered judgment of economists is, in general, adverse to tariff protection.

The economists also pointed out that the value of protected production in Australia in 1928 was £150,000,000. In my own study of this subject, I find that when the first tariff was inaugurated, the object was to effect a compromise between the views of the various States, and to meet the financial requirements of Australia. Therefore, we had partly a protective and partly a revenue-producing tariff in the first instance. In 1908, the Lyne tariff brought about a general increase of duties, and there was a further extension of the duties in 1914 under the Tudor tariff. In 1921, when the Greene tariff was submitted, it was pointed out that the duties then operating were inadequate, and the government of the day believed that the new tariff would prove satisfactory to the manufacturers. Under the Rodgers tariff of 1922, the Pratten tariffs of 1926 and 1928, and the Scullin tariff, the protective wall was gradually raked to heights beyond what was originally conceived to be required to meet the needs of this country, and as the economists have pointed out, the duties have been increased to such an extent that the costs imposed by the tariff have outstripped the benefits derived from it. It appears to me, as a new member, that the present position should be carefully considered. I believe in protecting industries, if that can be done without exploiting the purchasers, but there is ground for suspicion that manufacturers and combines unduly raise their prices under cover of the tariff. I contend that articles which cannot be satisfactorily produced in Australia should not be subject to the tariff. Then the people generally would get the benefit of reduced prices.

Mr PRICE:
Boothby

.- I have listened attentively to the speeches of honorable members on this vital subject. The honorable member for Darling Downs (Sir Littleton Groom) referred to the possibilities of development in Queensland, and mentioned, particularly, the scope for the cultivation of sugar, cotton, and tobacco, and the development of the dairying industry. He even referred to the production in that State of canary seed. If time permitted, I could deal with the room for similar develop- ment in some of the southern States. Efforts are being ‘ made throughout the Commonwealth to encourage land settlement, but I wish to know how we are to obtain markets for our products. Difficulty is already being experienced in this direction, and I maintain that it is essential to encourage inter-Empire trade. I should like the Government to inaugurate an inquiry, at the earliest possible moment, as to what commodities can be economically manufactured in this country. In the absence of this information, we are at a loss to know on what lines we should proceed in framing the tariff. Many duties that have recently been imposed have operated against the best interests of Australia. I had hoped that the Scullin tariff would relieve the unemployment situation, but it has not had that effect. The honorable member for Melbourne Ports (Mr. Holloway), who referred to the Geneva Conference, pointed out that the present tariff was an emergency one. While I do not agree with everything that the present Govern ment has done, I believe that it has endeavoured to rectify outstanding anomalies. Although it has increased the duties on eleven items, it has made reductions in the duties on 69 items.

The forthcoming Imperial Economic Conference at Ottawa will be of vital importance to the Empire, and I trust that the delegation to be sent from this country will be able to obtain great trade benefits for Australia. For many years we have given substantial preferences to Great Britain, and, having had an opportunity of studying the conditions there, I am pleased to know that under the new fiscal policy of the Old Country, greater encouragement than has been given in the past will be afforded for the consumption of Australian products. I was in England as Agent-General for South Australia for a period of three years, and I noticed that the Empire spirit was growing. The following official figures, with which I have been supplied,show the value of Australia’s imports and exports from 1929 to 1931 :-

I believe that there is a good opportunity for trade’ in the above goods with Great Britain and the Dominions.

In the past Australia has been Britain’s second best customer, but I am afraid that owing to the depression, and the consequent reduction of the purchasing power of our people, we shall have difficulty in maintaining that position. I hope, however, that Great Britain will appreciate our circumstances, and deal more generously with Australia than it

The figures relating to our importations of motor car parts and petroleum and shale spirit disclose startling information - has done in the past. At the Ottawa Conference, meat will probably be one of the principal items discussed. In regard to beef, the Argentine is a serious competitor with Australia, but our meat industry is capable of considerable development, and I trust that our delegates will be able to negotiate a treaty that will give to Australia some advantage in the markets of the Mother Country. If Great Britain will take our wool, wheat, dairy produce, dried fruits, wines, and other primary produce in greater volume than hitherto, I shall be prepared to give further consideration to preferential tariffs. I again ask the Government to institute, meanwhile, an inquiry as to what goods can be economically manufactured in the Commonwealth.

Mr JENNINGS:
South Sydney

.- This debate has emphasized the extent to which the primary and secondary industries, and the consumers and the arbitration system are involved in the tariff policy. Exchange also has been mentioned, but it is so uncertain and fluctuating that it is not a factor to be taken into account in the fixing of Customs duties. There are many important secondary industries in my electorate, and . I intend to support the adequate protection .of industries with due regard to the recommendations of the Tariff Board, and the interests of the primary producers. The manufacturers have been charged with having exploited the tariff by charging unreasonably high prices, but no specific instances of this abuse of protection have been mentioned. Some of the secondary industries, including iron and steel and hat-making, are struggling for their existence. A large proportion of the Australian population is engaged in manufacturing, and we must be careful not to reduce the tariff protection to such an extent as to undermine the stability of our factories and increase unemployment. My experience of both manufacturing and importing has taught me that the tariff problem is closely connected with the industrial arbitration system. Wages in Great Britain are approximately 50 per cent, lower than in Australia. No arbitration a(ward: are in operation in the United Kingdom, and the manufacturers there have not to observe those strict lines of demarcation which operate in Australia to prevent an employee from being transferred from one class of work to another. British factories have also the advantage of mass production. The wages and other conditions imposed by the Arbitration Court which increases the cost of production, are largely responsible for the high prices of Australian products in comparison with those ruling in other parts of the world. The arbitration system has been accepted by the Australian people; and we should seek to improve it by having one uniform arbitration law throughout the Commonwealth. I agree that a scientific tariff is necessary. We should particularly aim at the reduction of duties on those goods which cannot be produced economically in Australia. For instance, medical and dental equipment and supplies used to conserve the health of the people the duties on which are a factor in increasing the cost of treatment to the public, and the implements and appliances of primary production which cannot be locally made, should receive special consideration. The only way in which the tariff can be scientifically regulated, with due regard for the interests of primary producers, manufacturers, and consumers, is by having all contentious duties reported upon by a board of experts, who are free from political control. We have such a body in the Tariff Board, and if we pay regard to its recommendations we shall be conserving the best interests of the nation.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– One aspect of the tariff has been either overlooked or insufficiently stressed during this debate. All the protagonists of the high protection policy seem to think that any secondary industry, exotic or otherwise, may be established in Australia, paying the highest of award wages and offering the best working conditions. Accountants having compiled a statement of production costs, including depreciation, interest on capital, and many similar charges, and debited them against the working costs, the Tariff Board may then be approached for a protective duty sufficient to cover all those charges and still leave a margin of profit. Ultimately all these additions to the cost of living have to be borne by the primary industries, particularly those which export. They are just as much entitled as are the secondary indus.tries to charge depreciation, interest and other costs against working expenses, and to claim reasonable working conditions for their employees, and a profit on the labour and capital they have invested. But they are not allowed to do so. Even members of the Opposition will admit that almost every exporting industry is being operated at a loss. In New South Wales the rural award was abolished by the Bavin-Buttenshaw administration, and even so fervent an advocate of arbitration as Mr. Lang did not see fit to restore it - a definite admission by him of the unfortunate position of the primary producers in that State. Similar conditions obtain throughout the Commonwealth. But whilst the protagonists of high protection have insisted, during this debate, that award rates shall be paid in the secondary industries, they have shown no concern for the wages paid in the primary industries, on which secondary production leans. The honorable member for Martin (Mr. Holman) has asked for definite information as to the real effect of the tariff on exporting industries. He doubts the contention that the high protective duties vitally affect the primary industries; the adverse effects, if any, are, in his opinion, to be seen only in increased charges for galvanized iron, fencing wire, and-similar items. The honorable gentleman seemed astonishingly innocent of a vicious circle which I have never been able to ignore.” His attitude was that too often adopted by city men who derive their incomes from professions and businesses, and are unable to understand the difficulties of the man on the land. It is not only the machinery, galvanized iron and other products that the man in the country buys which add to his cost of production ; the wages that are paid in the city as the result of a high tariff, and freights, also contribute their quota, so that, in the aggregate, his costs are increased enormously.

The honorable member for Martin (Mr. Holman) said that his inquiries led him to believe that a man with a 1,000-acrc block could not suffer from the operations of the tariff to the extent of more than about £75 a year in his production costs. I advise the honorable member to study the economic review of our tariff that was made by a committee of experts, and quoted from by the honorable member for Werriwa (Mr. McNicholl). Those gentlemen state that, during the year 1927, the total cost to the producers of the operation of the tariff, was £36,000,000, on an imposition of 9 per cent, in production costs. A large portion of our tariff charges is offset in industries which are able to take advantage of home markets, and receive government assistance, so that ultimately our exporting industries have to carry almost the whole of that £36,000,000, and their costs are really inflated by from 20 per cent, to 30 per cent. Taking 20 per cent, as a conservative estimate, and applying it to the prices for wool in 1927, the tariff meant an increase of 4d. per lb. in the cost of production. We know perfectly well that costs are higher to-day, but even applying that 4d. per lb. to a run of 2,500 sheep, which in boom times is regarded as the minimum number from which a man can make a reasonable living, it works out at £333 per annum on a total of 20,000 lb. of wool on a yield of 8 lb. per fleece. It must be admitted that that sum makes all the difference between a living and ruin.

Various members of the Opposition have said a good deal about the undesirability of Australians becoming the “ wood and water joey “ of other nations. I point out that, as the direct result of the tariff policy thrust upon us by the Scullin Government, a large section of our farming community is being forced into a condition of almost abject slavery, comparable with that of the peasantry of Europe. This is because the Scullin Government made a fetish of establishing industries regardless of their economic soundness.

Too little recognition is paid to the fact that our pioneers established Australia’s great exporting industries without the aid of any protective duties. This continent was a vast and unknown wilderness, with no roads, railways, or other means of communication. It took six months for our goods to reach the markets of the world, where they had to face the bitterest competition, with no protection except their merit. In the face of that opposition our predecessors succeeded in establishing Australia’s wool aud wheat industries, which are second to none in quality and are our sheet anchor in prosperity and adversity alike. When one reads of applications being made to the Tariff Board for a high protective tariff for another industry on a pocket handkerchief scale, one can only deplore a fiscal system which so heavily penalizes true worth in order to exalt puny inefficiency. That policy is the more to be deplored because it brings discontent and poverty to our producers, is a fruitful source of bitterness, and even fans the flame of secession. It is the most outstanding example of what in other countries is regarded as one of the greatest menaces to the peace of the world. While I warmly support the reductions that are embodied in the schedule, I trust that the Government will take the earliest opportunity of bringing about a more comprehensive review of the Australian tariff.

Mr BERNARD CORSER:
Wide Bay

– I have listened with interest to the arguments advanced in support of, or against, freetrade and protection. Particularly have I listened keenly to the speeches of honorable members of my own party. I cannot say that on all occasions I agree with their contentions. Some of them appear to be freetraders, who do not desire openly to espouse that policy.

Every endeavour has been made by those who oppose tariff protection and the development of secondary industries, to claim that all the sins which are visited upon us may be laid against the door of our secondary industries. I do not agree with that view. No one is more’ anxious than I for the successful development of our primary industries. I desire that those engaged in them shall receive adequate remuneration for their toil and sacrifice, but I do not think that we can assist those persons by destroying the possibilities of our secondary industries. The unfortunate position of our primary industries is a natural corollary of world conditions. If the economic difficulties now facing the world were removed, if the United States of America were to see the light and wipe out the world’s war debts, so that credits were available and the purchasing powers of nations re-established, to the advantage of Australia, those engaged in our great exporting and associated industries would receive adequate compensation, and our secondary industries would be developed. Most honorable members will admit that the greatest asset possessed by our primary producers is our home market. The more local consumers we have, the better opportunity there is to obtain a reasonable price for a commodity.

Mr Hutchin:

– Especially in regard to sugar.

Mr BERNARD CORSER:

– An examination reveals that, taking the period from 1912 to the present time, the people of Australia have purchased their sugar requirements more cheaply than have the people of any other white country in the world. Honorable members are sadly lacking in their knowledge concerning that great industry. Only recently they have been misinformed on the subject by the AuditorGeneral, who has seen fit to exceed his duty, by entering the lists of political argument, and making statements which do not conform with facts. I am surprised that the Government has not taken action to deal with the Auditor-General, and I trust that it will see that there is no repetition of the occurrence. He did not, compare his own job with Javanese labour. Ho did not say at what rate of pay a Javanese firm of accountants would be prepared to audit Australia’s accounts, compared with what he himself receives. The honorable member for Forrest (Mr. Prowse) and others have repeatedly claimed that we, could get our sugar from black labour countries at a fraction of what it is costing us now. We know that it is impossible for Australian workers to compete with black labour. The low standard of living endured by the workers in Java, Cuba and other sugar-growing countries is responsible for the low prices at which the sugar of those countries can be sold. There is this to remember, also. The price of blackgrown sugar on the world’s markets today is even lower than the cost of production by black labour. There is a glut of sugar on the market, which accounts for the extraordinarily low prices prevailing. Moreover, much of the sugar which is quoted against the product of our mills is of inferior grade. Australia i3 the only country in the- world where cane sugar is being produced by white labour. People living in the southern States, who are disposed to criticize Australia’s sugar policy, should remember that Queensland, and particularly the northern part of Queensland, provides an excellent market for much of the goods manufactured in southern factories.

Some honorable members have had a good deal to say about the protection afforded to the pearl button manufacturing industry. This industry, though a small one at present, is providing employment for a considerable number of men. Its critics say that it is not reasonable to grant protection to the extent of 300 per cent, or 400 per cent, to any industry, but they omit to point out that the industry does not ask for any protection against British imports, but only against the cheap, inferior products of Japan, and other Asiatic countries.

Mr Dein:

– We sell Japan some of our wool.

Mr BERNARD CORSER:

– A diminishing quantity, as will be seen if we compare last year’s sales with those of 1928 and 1929. In any case, are we to allow our local industries to perish for the sake of preserving our wool trade with Japan ? - That country will buy our wool if she wants it, no matter what we do in regard to pearl buttons. The button manufacturing industry in Australia is making buttons from shell gathered in Australian waters, and it is worthy of protection. Some honorable members claim that, under a system of protection, the primary industries are called upon to make all the sacrifices, without receiving any corresponding benefits. That is not true. The development of our secondary industries provides a local market for the absorption of our primary products. One honorable member said that the protection of the pearl-button manufacturing industry would increase the cost of the workers’ shirts, but there would be no economy to the workers if they had to use cheap imported buttons that would break the first time a garment was put through a mangle.

I do not support exorbitant tariffs. I do not believe that the late Government’s tariffs’ have proved beneficial to Australia. Many of our markets overseas have been lost because of the ridiculously high tariffs imposed by the last Government. Australian exporting industries have suffered because of the retaliatory duties imposed by Germany, Prance and Italy on our primary products. We should not impose a general prohibitive tariff on the exports of countries with which we do a valuable trade, but I should have no objection to the imposition of even a prohibitive tariff against the United States of America. I notice that in this schedule it it proposed to reduce the duty on certain electrical cooling apparatus imported from that country. The Government is favouring the United States of America at the expense of Great Britain. During the last ten years, our trade with the United States of America has cost us £210,000,000 in gold to square our account. That is a damaging trade to Australia, and we would be better off without it. Our trade is sufficiently valuable to enable us to bargain for favorable treatment with other nations. There is nothing to stop us from entering into trade agreements which would benefit Australia and the other countries concerned. I hope that something of this kind will be achieved at the Ottawa Conference. We should not give the power to two or three representatives of Australia to decide which commodities should be purchased locally, and which should be obtained overseas. That decision should rest with this Parliament. The Australian delegation to Ottawa should have power to make certain suggestions and to enter into certain arrangements with regard to trade; but it should not be permitted to complete the negotiations with Great Britain and the other dominions. Some honorable members seem to think that in framing the tariff consideration should be given only to two exporting industries, wool and wheat; but if such a policy were given effect Australia would soon be in an unenviable position. Our first consideration should be to provide employment for our own people. If, in the opinion of any honorable member, the duties on any particular item are too high, he should concentrate his attention on them and not be prepared to wipe out all the secondary industries of Australia.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– The tariff is not a cure for unemployment.

Mr BERNARD CORSER:

– Quite so ; but if some honorable members had their way they would destroy the tariff and make employment almost impossible.

Mr Hutchin:

– Is the honorable member referring to the honorable member for Forrest?

Mr BERNARD CORSER:

– I do not associate myself with the honorable member for Forrest on the tariff issue. On this occasion he speaks, not for his party, but for himself. The tariff should be framed in the interests of all sections of the community. We cannot’ afford to consider only the interests of our export industries. We must not upset industry and so bring about greater unemployment, nor upset the home market so essential for our primary products. I hope that honorable members will cast an intelligent vote on this issue, and not be guided by statements similar to that of the Auditor-General of the Commonwealth, who appears to be determined to injure the sugar industry of Australia. The figures quoted by him have been proved to be wrong, yet he is not big enough to admith is mistake.

Mr M Cameron:

– Does not the honorable member think that those engaged in the sugar industry should share in the sacrifice of the community generally?

Mr BERNARD CORSER:

– The sugar-grower has suffered a bigger reduction than most sections of the community. He has been forced to become an exporter of sugar. The value of our sugar exports is now about £3,000,000 per year. The growers are suffering a loss on every ton of sugar sold overseas, because the markets there are glutted. Black labour countries are selling sugar at a price less than the cost of production. The sugar-grower of Australia is receiving the lowest price that he has received for many years. He is being adversely affected by the climatic conditions, and he is not in clover, though some honorable members seem to think that he is. Misleading statements have been made to the effect that the industry is in the hands of Italians. Actually, the Italians represent 2 per cent. of the labour on the cane-fields. Many of these bogies have been raised by would-be importers of black sugar, who wish to exploit the public. The sugar industry is the greatest and most efficient organization in Australia. The cost of production is lower than in any other country, and the tendency is to secure more and more from the acre and from the cane itself. An organization at Temple Court, Melbourne, in the interests of black-grown imported sugar, has supplied the propaganda used in this debate by the honorable member for Forrest.

Mr Cameron:

– Is not the Colonial Sugar Refining Company making huge profits ?

Mr BERNARD CORSER:

– The profits of the company -1/10. per lb. - are made from the refining of sugar manufactured in Australia and in the islands. Its investments in Australia are sufficient to enable it to make a profit, apart from the refining of sugar. The company is absolutely tied by the conditions laid down by the Governments of Australia. It has entered into a contract to refine, at a specified price, sugar supplied to it. If honorable members, after learning the facts, consider that that price is unfair they should make representations to the Government. The sugar consumed by the Australian public is superior in quality to that in use elsewhere. If sugar grown in Java were imported here, the Colonial Sugar Refining Company would have to refine it before the Australian public, which is accustomed to the best sugar in the world, would accept it. It is because of the superior quality of our sugar that we are able to export it at all. Certain secondary industries must be maintained if we are to keep our people in employment. The wholesale reduction of the tariff would bring about wholesale unemployment and misery among the community. We should not be led away by the oft-repeated statement that certain duties must be reduced to permit of the satisfactory export of wheat and wool. Those commodities will benefit when overseas prices improve. If our secondary industries were closed down the local market for wheat and wool would decline considerably. Nothing that wc can do can influence world prices of our export commodities. But we can do something to fix the prices of these commodities within Australia. I have given notice of a motion for the adoption of a policy which will have this effect.

Mr Prowse:

– The honorable member’s proposal will not get us anywhere.

Mr BERNARD CORSER:

– I disagree with the honorable member. Under existing conditions it is not possible, except in a few instances, to fix a fair price for the whole of Australia for products for home consumption. The honorable member for Gippsland (Mr. Paterson) has done yeoman service to the dairying industry, but there are not many industries to which his scheme could be applied with satisfactory results. If the honorable member for Forrest (Mr. Prowse) would support my proposal, he would help the producers to get somewhere. But whether small Australians resist this scheme or not, I shall press on with it. Wc must enforce a reasonable tariff in Australia for the protection of the secondary industries which are necessary here, or can be established on an economic basis. The sugar industry would not be on nearly so satisfactory a footing if black labour were introduced, for labour cost is not the only factor to be considered. I am in favour of doing everything possible to encourage our primary industries. Wheat and wool should be given more protection, but to be consistent we should also afford more protection to secondary industries.

Mr Abbott:

– Nothing has been done for the wool industry.

Mr BERNARD CORSER:

– That is not so. Hundreds of miles of railway have been constructed into remote parts of the States in order to assist the wool industry by way of transport. The general community is also bearing the cost of the high exchange rate on interest payable overseas iii order that the wool and wheat industries may benefit by £20,000,000 through exchange. .

Mr McClelland:

– Where would Australia be if it were not for the exchange rate?

Mr BERNARD CORSER:

– I am not asking that the exchange rate shall be reviewed. But I am saying that the general public is bearing the burden of this rate in order that the wool and wheat industries,’ in particular, may benefit from it. I resent the statement that nothing has been done to assist the wool industry.

Mr Abbott:

– The wool-growers pay heavy freights for any goods they send to the railways for shipment to the seaboard.

Mr BERNARD CORSER:

– They certainly pay high rates in New South Wales.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– And much higher rates in Queensland.

Mr BERNARD CORSER:

– That is not so. Railway charges have been reduced three times by the present Queensland Government, and they were increased four times by the previous Labour administration, in that State. I wish to make it quite clear that I am proud of the Australian wool industry. We are producing the best quality wool in the world. We cannot, however, control conditions in other countries. It is for that reason that the wool industry is in its present unsatisfactory condition.

The CHAIRMAN:

– The honorable member’s time has expired.

Mr GUY:
Bass

.- Our tariff policy has been discussed from almost every angle during this debate, and I do 110t propose to traverse the ground covered by other honorable members ; I merely wish to make my own position clear. During the last election campaign I urged a return to tariff sanity, and advocated an economically sound tariff, with effective preference to Great Britain ; and inter-dominion reciprocity. Protection is the settled policy of Australia. I am anxious to encourage Australian industries which can be established on sound economic lines. I stand for an adequate measure of protection for which Australian industries offer reasonable economic opportunity. I know that there arc numerous anomalies in our tariff laws, that inordinate profits have been made, and that certain monopolies have been created under our tariff system ; but we must continue to develop a sound tariff policy. I am opposed to any drasticalterations in the existing tariff until an exhaustive inquiry has been made by thf Tariff Board. I urge a systematic review of the whole of the incidence of our tariff by the Tariff Board before any widespread reductions are made. The object of a tariff should be to impose sufficient duty to enable the efficient manufacturer to develop his business, and secure trade. This would tend to promote efficiency and economic production, and would be less disruptive in its effect than some of the prohibitive duties which operate to-day. Referring to anomalies, I cite the case of various manufacturing firms which were desirous of enlarging their business by manufacturing articles which they previously imported. They desired to turn raw materials into the finished article, thus creating additional employment; but to do this it was necessary to import plant and machinery, which, because of the prohibitive duty imposed, proved too expensive. I most heartily support the view of the honorable member for Denison (Mr. Hutchin) that specialized and complicated machinery required for basic industries should be admitted to Australia free or under a nominal duty, for the importation of such machinery under those conditions would undoubtedly help us to establish additional industries on sound lines. The Tariff Board, in its last annual report, made some important statements in regard to our tariff policy. The following paragraph is well worthy of earnest attention: -

The Tariff Board is strongly- of the opinion that the period of deflation through which Australia is now passing, when reductions in the earnings of both labour and capital arc being forced upon all, demands a systematic review of the tariff in order to ascertain to what extent natural industry can be resuscitated by the reduction of duties on essential plant and materials.

I heartily commend that view. If the duties on essential plant and materials were reduced it would be possible for us to turn more of our raw materials into finished products. The board went, on to say that -

At the present time, more than at any other in the history of Australia, it is essential to examine the incidence of the tariff as it reacts on the productive capacity of the community. If uneconomic industries arc being maintained at too great a cost it must tend to retard other more natural industries, whether primary or secondary.

I subscribe to that contention. The board also warned the previous Government that excessive duties might shelter uneconomic industries unduly, tending to lack of efficiency, or result in the making of undue profits. Many industries have been over protected. I shall refer to one case of totally unjustifiable protection. An industry which requires protection to the extent of £656 for £317 worth of hydrogen peroxide is undoubtedly a burden on the community. Either the industry is being run inefficiently and uneconomically, or excessive profits are being made. Last December a quantity of hydrogen peroxide was purchased in Great Britain for £317. The duty on it amounted to £656, but, owing to exchange, freight, landing and other charges, the material, when landed in Australia, cost £1,149 6s. Sd. I heartily agree with the Tariff Board that, in some cases, the duties imposed are inimical to the best interests of Australia, because heavy burdens are placed upon the consumers. The Tariff Board states that in numerous instances there is ample justification for a substantial reduction of prices, because of the abnormal profits being obtained; but instead of action being taken to reduce prices, certain interests have actually asked for further increases in duties. In that regard the board reported -

In several cases dealt with by the board in. the period covered by this report there was evidence that the manufacturers who made requests for increased duties, or supported proposals for such duties, could, by reducing the selling prices of their products, have secured a considerably greater output in competition with imported goods. There was also evidence that the manufacturers concerned, although earning profits which justified such action, had made no attempt to reduce their prices. Instances came under notice where requests had been made for increased duty, or support had been given to increases embodied in tariff proposals, by manufacturers earning abnormal profits. One manufacturer, in an industry supplying goods to the value of £100,0150 per annum, was making 100 per cent, per annum on the capital employed in his business. Another company, with an output of £50,000 per annum, had paid dividends ranging from 224 per cent, to 12$ per cent, over the four years preceding the inquiry. In another industry a company having an annual turnover of over £1,000,000, made over a period of seven years profits ranging from 37 per cent, to 13i per cent, per annum on the capital employed.

On that score alone I have advocated a systematic review of the whole incidence of the tariff, in order that anomalies such as have been quoted by the Tariff Board may be rectified. I said at the outset that we all desire a return to sane protection. Let me quote the following extract from a leading article published in the Launceston Examiner recently:-

What is sanity in protection? Why nol define it by a maximum duty beyond which an industry would be regarded as uneconomic? If it cannot exist on that duty, then Australia would be better employed in producing something for which it is more naturally fitted.

The- Government might well give consideration to that matter, or refer it to the Tariff Board.

I regard the action of the Government in bringing down its first tariff proposals, as a good omen with regard to the Imperial Economic Conference to be held at Ottawa. We should take every opportunity of fostering trade reciprocity within the Empire. I believe in a generous measure of Empire preference and reciprocal trade agreements with the British dominions. Ninety per cent, of our exports consists of food-stuffs and raw materials, but half of these goods goes to foreign countries. Great Britain imports her chief supplies of butter from Denmark, although Australia could provide her with all the butter required. Britain depends mainly on the United States of America and Greece for dried fruits, on California for canned fruits, on America for apples, on Cuba for sugar, and on Portugal for wine. Ninety per cent, of the beef imported into Britain in 1928 came -from the Argentine. Australia could supply the whole of these goods. In 192S the trade of the Empire totalled in value over £3,300,000,000, and only 25 per cent, of that was conducted within the Empire.” This fact provides ample material for consideration at Ottawa. The French, Japanese and Italian empires trade chiefly within their own borders, but the British dominions deal largely with foreign countries. In 1929, Australia imported from America goods to the value of £35,500,000, and America took in return goods worth £5,500.000. Our trade balance in favour of America in that period was £29,500,000, and the adverse balance for the seven years which ended on the 30th June, 1930, was no less than £200,000,000. The following table shows the outstanding debit balance of trade between Australia and countries outside the British Empire in 1928-1929 :-

In conclusion, I repeat that I heartily support the proposals of the Government, because I regard them as a first step towards economic rehabilitation. I trust that the whole incidence of the tariff will bc referred to the Tariff Board.

Mr STACEY:
Adelaide

.This debate has proved of great interest to me as a new member. I do not intend to discuss particular items at this stage, but I propose to refer to an attack made upon honorable members from South Australia, including myself, by the Leader of the Country party (Dr. Earle Page). The right honorable member quoted from a pamphlet several recommendations regarding the tariff made by the emergency committee that was appointed in Adelaide. The candidates of the United Australia party at the recent election stated that they were opposed to high tariffs, but the right honorable member for Cowper, in his quotation, stopped at a point which suited his particular purpose, for it was mentioned in the next paragraph that the candidates would be guided by the reports of the Tariff Board. The right honorable member, and other members of the Country party, advocate an immediate reduction of duties, but they do not object to the tobacco duties remaining high, nor do they complain of the embargo on sugar. The sugar embargo imposes on the people of the various States a charge in the region of £5,000,000. Assuming that there are 25,000 employees in the Australian sugar industry, the Commonwealth is finding £200 per annum for each of those employees. I would remind the right honorable member that God supplied him with two eyes, and he should use both of them. The Scullin Government built up a tariff wall which was altogether too high, and it is proving too costly to the consumers. All honorable members on this side, I think, are opposed to high duties, but the much desired reduction must take place gradually, because a sudden return to the 1928 level would cause a national calamity, owing to the revenue that would be lost. I shall give one or two instances of the detrimental effect of the tariff on Australian trade. Until about two years ago Australia was exporting annually to x’ ranee about £15,000,000 worth of produce, principally wheat and butter. The high duties and prohibitions imposed by the Scullin Government caused France to retaliate by increasing the duty on wheat from 4s. to 10s. a bushel and the duty on butter from 16s. to 98s. per cwt. A few thousand pounds were gained by imposing excessively high duties on imports, but £15,000,000 worth of trade with one country was lost. Abnormal duties have had, and will continue to have, a boomerang effect upon us. We were exporting considerable quantities of fruit to Germany, but our tariff caused the Government of that country to increase the duty on apples by 2s. a case. These facts illustrate the damage done by the excessive duties imposed by the Scullin Government.

In view of the imminence of the Ottawa Conference, I arn of opinion that, the comprehensive review of the tariff schedule should be deferred. If we attempt to deal with the tariff now, many of our decisions may have to be revised when the decisions of the conference are known. I have great faith in the gentlemen who will represent Australia at Ottawa, and I expect much good to come to us from their labours there.

Mr BLAKELEY:
Darling

– During this debate the speakers have ranged from the hostile and semi-hostile freetraders of the Country party, and the protectionists and anaemic protectionists on the Government side, to the fullblooded protectionists of the Labour party. I offer no apology for speaking, even at this late hour. Although I have had fourteen years experience of tariff debates, the extraordinary confusion in the minds of various honorable members regarding

Australian fiscalism has been a revelation to me. I hope that I -shall be at least consistent, and extend to the primary industries the same protection as I advocate for the secondary industries, but in this committee are piebald freetraders and piebald protectionists. Naturally, the opinions of honorable members are influenced by their electorates and their parties; but I have always been a protectionist, and, therefore, in advocating protection I am on familiar ground.

When the Scullin Government assumed office it was beset by many dangers, chief among which were the accumulated deficit left by the the tragic Treasurer of the tragic Bruce-Page Government, and a serious adverse balance in . respect of the overseas trade. The Bruce-Page Ministry, which pretended to be protectionist, but was more or less freetrade, had been in office for six and a half years. The necessity for a sane fiscal policy which would save Australia from financial disaster overseas was impressed upon the Scullin Government as soon as it assumed office. Its predecessor had borrowed abroad at the rate of £30,000,000 a year, and that money could come to Australia only in the form of commodities. While the ‘tween decks of steamers from Europe were crowded with migrants, the holds were filled with imported goods, and Australia is now reaping the whirlwind of that insane policy. In order to stop the financial drift, to enable the Commonwealth to meet its overseas obligations, and to lessen the flood of imports, the Labour Ministry took prompt and drastic action. I do not say that the anaemic fiscalism of the Bruce-Page Government was responsible for all the financial ills of the Commonwealth, but the unrestricted borrowing overseas led to £30,000,000 worth of foreign goods being sent to Australia annually.

Mr Thompson:

– Most of that money was borrowed for the States.

Mr BLAKELEY:

– Whether the money was borrowed for the States or the Commonwealth it could come to Australia only in the form of goods, and certainly the Bruce-Page Government was one of the heaviest borrowers. During its disastrous term of office imports exceeded exports by £92,000,000. I do not know whether that Government applied a “ scientific tariff “, or whether duties were “ systematically reviewed.” But I do know that when the Scullin Ministry assumed, office in 1929 Australia was almost on the verge of being unable to pay its way. The heavy borrowing by the Commonwealth dissipated our credits abroad, and created a serious adverse trade balance. Ample warnings of that disaster were not lacking, because of the last three loans floated, by the Bruce-Page Government each was a more ignominious failure than its predecessor, and the underwriters had to take up large percentages of each flotation. Yet the Government continued merrily a policy of what was termed by one of its supporters “ sane finance “.

The CHAIRMAN:

– The honorable member’s remarks are scarcely relevant to the tariff. I ask him to connect his remarks with the schedule.

Mr BLAKELEY:

– Because of the fiscal policy of its predecessor, the Scullin Ministry was forced to take action to prevent a collapse of Australian credit overseas. The flood of imports was reduced, for the very good reason that we could not afford to pay for them. No individual is entitled to purchase goods for which he cannot afford to pay. If a member of this Parliament receives only £800 a year he must live within his income. A nation is under the same obligation. But the Commonwealth had not lived within its income for more than two years during the six and a half years of the Bruce-Page Administration. “We prohibited further importations of many classes of goods. The reasons for Australia’s ills were selfevident. Hundreds of thousands of unemployed were making their way between mountains of wool and wheat, and the crazy monetary policy of capitalism was unable to evolve a simple means of making the surplus commodities available to the would-be consumers. But the opponents of Labour sought to blame the fiscal policy of the Scullin Government for the Commonwealth’s economic ills.

The right honorable member for Cowper (Dr. Earle Page) pointed out, almost proudly, that the tariff policy of the Scullin Government had not solved our financial ills, and as proudly declared that, while we had an adverse t.rad-3 balance, our condition was good. That position was accentuated by the crazy fiscalism of the Bruce-Page Government. While I do not for a moment claim that the reduction of our importations was wholly due to the action of the Scullin Government, it may properly be claimed that the administration was almost wholly responsible for the rectification of our trade balance. That government took steps which the strongest protectionist administration would not take unless -urgent necessity demanded the action. Had any other course been taken Australia would have been compelled to default overseas, because money was not available to pay for our imports. The Scullin Government brought down our importations from £140,000,000 to about £43,000,000. No matter what fiscal policy is advocated by anaemic’ or fullbrooded freetraders-, by anaemic or fullblooded protectionists, by “ scientific tariffists “ or by “ systematic reviewists “, the fact remains that, for many years to come, we must have a favorable trade balance of about £35,000,000 a year.

I am not concerned about scientific or systematic reviews. My desire is that we shall employ our own people. The country that refuses to follow that policy must inevitably fail. Britain, the bulwark of freetrade, has been compelled by the same economic circumstances that exerted pressure on the Scullin Government, to develop- a policy of protection. It is doing so because it was being overwhelmed with the goods of other countries, for which it could not pay.

Mr Thorby:

– It was overwhelmed by the protectionist policy of other countries.

Mr BLAKELEY:

– Britain’s trade balance was so alarming that the nation was compelled to recognize the fact, and to set about building up tariff Avails. If a country cannot pay approximately for its imports by its exports, the position is untenable. The corner party and many honorable members opposite supported such an impossible position. Money was easily obtained, and cheap, so the BrucePage Government indulged in a orgy of frenzied extravagance.

Some honorable members are ardent protectionists on this or that industry, because it is in their electorate, and may give employment to 100 or perhaps 1,000 of their constituents. In contrast to them there Ls the fool-blooded freetrader, like the honorable member for Forrest (Mr. Prowse) and the honorable member for Swan (Mr. Gregory) who are consistently freetrade. I am in favour of employing labour wherever that can be done. Some honorable members advocate a scientific tariff. Frankly, I do not know what that means. Like “ that blessed word Mesopotamia “, it is, perhaps, merely something to talk about. On many occasions the Assistant Treasurer (Mr. Bruce), spoke glibly of the necessity for the application of a scientific tariff. His administration was in office for six and a half years, and the Scullin Government for two and a half years, yet the right honorable gentleman and a number of his colleagues said to the electors during the last campaign “ We must have a scientific tariff “. Others asked for systematic reviews. I have no difficulty in deciding what I want; it is a tariff that will encourage industry in Australia.

Mr Abbott:

– The honorable member is what may be termed a wholehogger

Mr BLAKELEY:

– I am a wholehogger, because I have always believed that it is dangerous for a country like Australia to be dependent upon countries from which it is far removed geographically. I recall the condition in which we found ourselves in the tragic years 1914-18. Our consumers were then robbed right and left, by unscrupulous importers. Whenever only limited supplies of an imported commodity were available, people had to pay through the nose for it. Had its local manufacture been established here we should have had control through the Commonwealth and State laws, and the Arbitration Court. Australia should be in a position to supply practically all its requirements.

The honorable member for Wentworth (Mr. E. J. Harrison) referred to the pearl button industry, and quoted figures purporting to show that the cost of the Australian product is hundreds per cent, higher than that of the imported article. I could understand the honorable member’s reasoning if he were dealing with trochus shell buttons on the one hand and pearl buttons on the other. We have had rubbishy buttons foisted on us- from all parts of the world. Whether buttons be made from mussels from the Mississippi or other rivers, or from trochus shell, they cannot compare with the beautiful product of the pearl shell, developed in deep waters under heavy pressure. A few years ago that industry engaged only two adults, with specially imported machinery, and six others. To-day there are about 65 employed in it and, had the Scullin Government continued in office, the number to-day would be over 100. Apparently, the Minister for Trade and Customs (Mr. Gullett) made a stab at this and that industry in an ill-considered effort to give effect to the rash promises of his party to introduce a “ scientific “ tariff. If the Government persists in its policy, it will strangle a number of industries. The pearl shell industry is an Australian primary industry, as is our haircloth industry, in which over 100 people are engaged. Because of the change of Government, the British Manufacturers Association has become most active, and is prepared to make sacrifices and lose money to re-establish itself in various industries that it lost under the Scullin administration. Pearl buttons have been landed in Australia at cut rates, and there has been an attempt to dump haircloth at prices against which it is impossible to compete. Honorable members who opposed the Scullin tariff, and who are hostile to this tariff, preach the cruel doctrine that we should buy on the cheapest market. ^ That would be a tragic doctrine for Australia to embrace, and if we accepted it, very few articles would be manufactured or produced in Australia. Some honorable members, most of them only recently ejected for the first time, were so carried away by the propaganda of the Housewives’ Association, that they promised the people during the last elections that they voild do everything in their power to remove the so-called burden imposed by the sugar agreement. It is possible to got plenty of sugar at a low priceProbably sugar could be imported from abroad, and distributed in Australia, at from 3M. to 3$d. per lb.

Mr Stacey:

– It could be done more cheaply than that.

Mr BLAKELEY:

– I am doubtful whether it could, because the world price for sugar to-day is about 3d. per lb. Moreover, most of the sugar we could import would be mill whites, or some inferior grade, and would have to be refined. The freetraders, semifreetraders, and semi-protectionists in this House are solid for protection on onions and rice, but are very wobbly when it comes to protecting the sugar industry. Suppose we let them have their way, and imported all the sugar that we needed in Australia. Immediately every sugar farm in Australia would go out of production, and 127,000 people engaged in the industry would have to find something else to do. Having got rid of the sugar industry, we now turn our attention to onions, rice and fruit. The honorable member for Wentworth (Mr. E. J. Harrison) complained loudly of the audacity of the Scullin Government in taking measures which increased the price of dates. He painted a harrowing picture of the hardships endured by housewives whose culinary activities were restricted by their inability to obtain dates. We make no apology for prohibiting the importation of dates, because they are a commodity which we were well able to do without. We were producing in Australia a dozen excellent substitutes for dates. The raisins and currants grown in this country are quite as good for cooking purposes as imported dates, and, from a hygienic point of view, are preferable. According to the policy of the anaemic freetraders and halting protectionists, however, we ought to have allowed the fruits of the Orient to take the place of the fruits grown in this conntry. On that reasoning we should abandon the production, of fruits altogether. We now come to butter. In all probability other countries - and one not very far from us - could produce butter, and sell it in Australia, cheaper than Ave can make it for ourselves.

Mr Thompson:

– Why is the honorable member building up this impossible argument?

Mr BLAKELEY:

– I am demonstrating the folly of the doctrine of buying in the cheapest market. I believe in pro- tecting Australian industries. I am not an ardent protectionist in regard to, say, rice, while advocating that galvanized iron should be imported free of duty.

Mr Stacey:

– In what market does the honorable member himself buy?

Mr BLAKELEY:

– I buy in the Australian market, and for two years I bought in that market while the fiscal policy of the Scullin Government prevailed. I arn prepared to pay more for the Australian article than for the imported one, as, I think, most Australians are. In regard to most of the items on the tariff schedule, the governments of Australia have shown that they also are prepared to pay more for the Australian article. The present Government, by reducing the duty on pearl buttons and on hair cloth, has destroyed those industries in Australia, and thrown 200 men out of work; but, for the most part, even this Government stands for the protection of Australian industries. Despite the opinions which have been aired by some honorable members, the majority of Australians are in favour of protecting Australian industries, and have no time for the doctrine of buying in the cheapest market.

Mr Stacey:

– Perhaps it would not be wise to tempt them.

Mr Prowse:

– Can the honorable member name any country that is selfcontained in regard to trade?

Mr BLAKELEY:

– I believe that everything possible should be done to enable us to supply our own needs. We should protect our primary and secondary industries as far as is humanly possible. The only way in which Australia can develop, and become a great nation, is to pursue a tariff policy, by means of which Ave can build up our own industries, and supply our own market.

Mr ABBOTT:
Gwydir

.Honorable members will agree that, although this debate has been protracted, it has been most interesting, and is a welcome change from the class of debate to which we have been compelled to listen during the last few weeks. This Parliament is now engaged in what is its national work. This is a big subject, and it has inspired some very able speeches. T refer in particular to the thoughtful speech of the honorable member for Melbourne Ports (Mr. Holloway), arid to other speeches delivered by new members on the Government side. One could not help feeling, however, that when the honorable member for Darling (Mr. Blakeley) got up to speak, he was so short of matter that he delivered a speech which he had used during the recent election campaign. At any rate, it had nothing to do with the subject under discussion.

The exchange rate is worthy of serious consideration in conjunction with the tariff, because at present it is an important factor in the protection enjoyed by Australian industries. The time has surely arrived when we should consider making an all-round reduction in the tariff. During the past year, wages and interest have been reduced, and it is now time to effect a corresponding reduction in the tariff. The items that we shall shortly discuss are not sufficiently important for honorable members to consider as a matter of general tariff policy. As the Minister for Trade and Customs has said, this schedule, is the fore-runner of others which will be brought down from time to time. On the 17th June, 1926, I had the privilege of addressing this chamber on the Conciliation and Arbitration Bill, and in the concluding portion of my speech I stated -

Until we are able to export more secondary products, there will not be much chance of progress in Australia. If the primary producers leave the bind, and production ceases, what shall we live on? We cannot live long on our own fat. 1 have tried to fmd a solution of this difficulty, but, I confess, it is beyond my power to find one of any practical value. The only suggestion that I can make is ridiculous. It is to assist primary industries as we are assisting secondary industries, and the men employed in them, by appointing a parity board which will decide, for example, that the high cost of wages and living has increased prices by Id. a lb. fur wool, and (id. n bushel for wheat, this increase to be made up to the primary producers by the Government nf the country. The community to-day is linking such a contribution to the workers nml to the manufacturers, and, as a result, primary production is on the down grade. Unless we have greater production, and decreased cost of manufacturing secondary products. Australia will not long be prosperous. We are living in a fool’s paradise. If primary production fails, the whole foundation upon which the prosperity of Australia rests will collapse.

Those words are true’ of the position o-day. It. is mainly because of the fall in the value of primary products that the Commonwealth is in its present difficult and critical position. The honorable member for Melbourne Ports (Mr. Holloway) said that all his life he had fought for a standard of living, and he undoubtedly referred to the standard of living of the workers. There is another standard of living for which many of us are fighting, and that is the standard of living of the primary producers, and I am not exaggerating when I say that they and their employees - where they can afford to employ labour - are not enjoying a satisfactory standard of living. The position of the primary industries in Australia is critical. The men and women engaged in those industries are suffering severe hardships. They are not complaining. Fortunately, they are trying to do their best, and if only a portion of their burdens is lifted I have no doubt that they will win through, and so be instrumental in pulling the Commonwealth out of its present dangerous position.

The honorable member for Martin (Mr. Holman), in a speech in which he did not appear at his best, was rather satirical in questioning the cost of’ the tariff in respect of primary production. He put forward a certain formula and asked for information with respect to it. That information has already been supplied, and I can only repeat it. The cost of the tariff in relation to primary production, as ascertained by the Dyason committee, was 9 per cent., but recently Professor Giblin stated in evidence in the Arbitration Court that that 9 per cent, had increased to 15 per cent., or even more. That burden is a grave and serious handicap on the primary producers. How could any man make a business pay if, in addition to earning a dividend on the capital invested, he had to earn another 15 per cent, to meet the cost of the tariff? We all agree, no matter to which party we belong, that a fiscal policy is the right policy for Australia; but there are divergent views as to what measure of protection should be given to industry. The great trouble is that the manufacturers of Australia have embarked on a too ambitious scheme of secondary manufacture. For example, in New South Wales there are two enormous iron and steel works, either of which is capable of producing the whole of Australia’s steel and iron requirements. In addition, there is a large works manufacturing galvanized iron, which has a capacity of 80,000 tons a year - the maximum quantity that Australia has ever required. The demand for galvanized iron has now fallen to 30,000 tons a year, and as a result the iron and steel factories in Australia are in a difficult position. Unless those works are able to export their manufactures, one of them must close down. In Australia we have been inclined to regard the home market as a much bigger factor in the absorption of our output than it really is. After all, the population of Australia is only 6,000,000, and, unfortunately, that, number is incapable of absorbing the output of our up-to-date factories. The population of the United States of America was, in 1790’, 4,000,000; in 1800, 5,000,000; in 1880, 50,000,000; and to-day it is 122,000,000. There is, undoubtedly, in ‘the United States of America a home market which warrants the establishment of large factories, although at present that country, like other countries, is in a desperate position. We, in Australia, have been far too ambitious in respect to the protection that we have given to both primary and secondary industries. Australia can overcome its difficulties only by ensuring a steady and continuous output of primary production. That output can be maintained first, let us hope, by good seasons; and, secondly, by a united effort on the part of the producers. It is doubtful, however, whether they will be able to carry their burden much longer. There is at present grave danger of the total collapse of primary industries. The position, in New South Wales in particular, is alarming. In the last few days two political parties in that, State have come together and agreed on a common policy, only because they have received definite and authentic information as to the actual financial position, not only of New South Wales, but also of Australia generally. Several honorable members have referred to the agreement which was arrived at between the leaders of the United Australia party and the Country party just before the last federal election. I attended the conference, and actually drafted the resolution relating to a revision of the tariff and a reduction in costs. The meaning of the draft agreement, although slightly ambiguous, was that there should be a downward revision of the tariff, so that costs could be- reduced in both primary and secondary industries. I have not a great deal to quarrel with in respect of the Government’s policy. I complain not so much of its sin of commission as of its sin of omission. The Government has not endeavoured to face the fiscal position squarely. It has introduced a small schedule which will not affect the position of the primary producers one iota. The only thing that it has done 13 to make a savage slash at one section of the primary producers. That action is quite unwarranted because, during the last tWo years, the Common- wealth Government has appealed to the producers concerned to increase their output. For that reason I shall certainly vote against the item when it is before the committee. The Minister has stated that probably in eighteen months or so we shall be a”ble to give full consideration to the tariff. But if immediate action is not taken to give relief to the primary producers, we may not, at the end of that period, be able to cope Avith the position. The Minister must realize that the plight of the primary producers is far too serious to permit of any delay in giving them relief from the tariff burden.

I hope that the Minister WIll not falter in giving effect to his promise to submit to us at the earliest possible date a completely revised tariff schedule, so that the burden on our primary producers may be lifted. The honorable gentleman is engaged in primary production to some extent, and I too, am conversant with the wheat and wool industries. There is very little time left for us to prevent tho total collapse of these industries. I warn the Minister that it is exceedingly dangerous to delay applying remedies to the troubles from which these industries are suffering, for delay may precipitate a crisis, not only in New South Wales, but throughout Australia. We havel been fortunate in having good seasons in the last two or three years, but on tie Jaw of average, we cannot expect good seasons to continue much longer. The Government has a “majority in this House, and it can, if it will, give full effect to the fiscal policy that it placed before the electors on the hustings. In all sincerity I urge it to do so speedily, for the position is extremely grave.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– The honorable member forDarling (Mr. Blakeley), in the course of his speech, made reference to various kinds of protectionists. I wish him to understand that I am definitely a protectionist. “When the Scullin Government introduced certain measures for the imposition of tariff prohibitions and surcharges, it was stated quite definitely by the Minister that these were emergency measures for the specific purpose of correcting our trade balance. Unfortunately, that announcement did not receive wide publicity, and many primary producers throughout Australia were ignorant of the true facts of the case. This has led to the trouble we are now having in connexion with the tobacco industry. Following upon the introduction of those prohibitions and surcharges, many people rushed to establish minor industries, but the official information made available by the Statistician of New South Wales indicates that these were not very successful, for, at the end of June, 1931, the number of factories in New South Wales had decreased by 664, and the number of employees engaged in factories by 34,766. Another unhappy and unforeseen effect followed the adoption of the Scullin tariff policy. When our primary produce was sent overseas, we found that duties which had been in operation against us, were heavily increased, or our products were refused admission to certain countries. We had trouble of that kind with Italy, France and Germany, and if we persist in the policy of tariff prohibitions and surcharges, we shall, sooner or later, be hit very hard ; in fact, our primary industries will be dealt a crushing blow. We were fortunate in that the immediate repercussions were not more serious.

I consider it the duty of Parliament to determine the general fiscal policy of Australia, but I do not think that it is in n position to fix the details of that policy.

In my electorate there’ are factories engaged in manufacturing straw bottle envelopes, egg pulp, pottery and sewing machines. I cannot -claim to be able to speak with authority on either the merits, or the needs of those enterprises. But the Tariff Board is an expert and impartial body, composed of well trained men. accustomed to sift evidence and to formulate judgments. We should do well to leave to such a body the determination of the exact measure of protection to be accorded to any particular industry. I believe that sufficient protection should be afforded our secondary industries to enable them to sell their products at a reasonable price.

Unfortunately, our primary industries are in a very difficult position at present. They need the sympathetic consideration of the Government. We know very well that galvanized iron, fencing wire, wire netting, vermin poisons and sprays, and other commodities are absolutely essential to successful primary production. But conditions are so serious that to-day our primary industries are practically living on the exchange. That is a very thin thread on which to depend. In view of the fact that our primary industries produce 97 per cent, of the wealth of Australia, it is important that we should put them in the best possible position. In the last four years the price of wool has dropped tremendously. In 1928 it was £24 19s. a bale, the next year it was £21 lis. 10d., the next year £13 5s., and in the year ending 30th June, 1931, it was approximately £11 7s. 6d. a bale. The figures for the year which has just closed are not yet available, but they will undoubtedly be still lower. If it costs anything between ls. and 16d. per lb to produce wool it is obvious that wool cannot be sold on a commercial basis for Sd. per lb. Under such conditions philanthrophy soon -breaks down, and one’s banking account peters out.

The sugar agreement has been mentioned during this debate, and it has been suggested that certain honorable members who represent the United Australia party have entered this Parliament with the deliberate object of tearing up that document at the earlies’t possible moment. That is not my attitude. I look upon the sugar agreement as a contract entered into between the sugar-growers and the Commonwealth Government, and I believe that it should be altered only by mutual consent. I certainly do not regard the agreement as a scrap of paper. Honorable members of the corner party opposite who say that we desire to tear up the agreement, are, to put it mildly, playing with the truth.

I do not propose at this moment to enter upon a long discussion of the Ottawa Conference. I snail only observe that our delegates at the conference will have a most anxious and responsible time. The conference will be fraught with immense possibilities of good for Australia. I believe that out of the discussions that will occur at Ottawa there will eventually grow complete Empire preference and inter-dominion reciprocity; but we must not be disappointed if we do not get everything we want immediately. The conference will present an unrivalled opportunity for discussing many of the great problems which *are facing Australia. I trust that our delegates will be able to do something there that will be of real help to our primary producers.

Mr THORBY:
Calare

.-I regard the tariff as one of the most important subjects which this Parliament will be called upon to discuss ; but at this stage of the debate, and at this hour of the morning, I shall not deal at great length with the various subjects that could be appropriately discussed. I sincerely hope, however, that the Government will recognize the great importance of our primary industries and the serious financial position’ in which they are to-day. Honorable members on both sides of the chamber have agreed that these industries are in a desperate condition and in great need of help. Their position is largely governed by the tariff policy of the Commonwealth Parliament. The rural industries are mainly the exporting industries, and these are carrying the great burden of direct and indirect taxation, because the tariff duties form an important part of the taxation imposed upon the people. Gradually that taxation is passed from one to another, until it ultimately falls on the shoulders of those who produce commodities which are exported, such as wheat, wool, butter and minerals, which form the national wealth on which the people of Australia generally depend. Some honorable members have suggested that the best market for Australia is the home market. In some cases it may be considered to be the most profitable market; but if it were not for the export market, Australia would soon become bankrupt. I need not do more than refer to the statement of the Leader of the Opposition (Mr. Scullin) when he personally appealed to the wheat-growers to produce more wheat and thus help Australia to meet its financial commitments and solve its economic problems-. We must ask ourselves what sections of the community are getting the greatest benefit from the tariff, and what sections are carrying the greatest burden. We should inquire whether we can more evenly distribute that burden over the shoulders of the whole of the people, recognizing that we are all protectionists of a class.

I came into this chamber pledged to bring about a revision of the existing duties, but I say definitely that I am not a freetrader. Although I support moderate protection, I consider that every section should carry its fair share of the burden imposed by the tariff, the object of which is to protect local industries against outside competition, and at the same time to raise a certain amount of revenue for governmental purposes. Under the present system, however, certain industries are protected to a much greater extent than is necessary. I shall not weary honorable members by giving details to illustrate my argument, but I draw attention to the fact that while certain sections derive great benefits under the tariff others are bearing undue burdens. The system should be modified so that every section would be adequately protected, and would receive a fair share of the benefits which should result from our fiscal policy. I realize that the tariff is vitally important to the secondary industries, not because the duties are’ necessary in all cases, but because those engaged in those industries have become accustomed to look for increased duties whenever they are faced with industrial or financial difficulties. Immediately it was . recognized by the employees that increases in duties enabled their industries to give them advantages they desired they demanded higher rates of pay and shorter hours. This ultimately increased the cost of production in those industries, and forced the employers to make further demands for increased protection. The manufacturers still obtained their usual margin of profit on the goods produced by them, but they evaded their share of the burden of protection. Similarly, the employees obtained increased wages and escaped their share of the burden. Ultimately the whole load fell on the shoulders of those engaged in the great primary exporting industries, which are now faced with the problem which must be solved sooner or later.

The primary producers, despite their increased costs, are still forced to sell their products on the world’s markets in competition with foreign countries. Those markets, of course, are beyond the control of this Government, and the primary producers recognize that they are not entitled to appeal to any ministry to. help them in overcoming difficulties due to the low prices -obtained by them for their goods sold overseas; but honorable members are justified in asking the Government of the day to recognize the justice of the claim of the primary producers who are carrying the great burden of protection to-day. They are at least entitled to Australian parity for every ounce of primary produce consumed in Australia. Surely no honorable member, irrespective of his party’s views, will deny the justice of that claim.

Mr Makin:

– That, I think, has never been disputed.

Mr THORBY:

– It has been disputed by a large section of the community, but I ain glad that the honorable member for Hindmarsh (Mr. Makin) agrees with me. It should be recognized that if we are to give protection to those engaged in the secondary industries, we should demand that those who receive benefits from protection should concede equal privileges to the primary producers with respect to that portion of their goods which is consumed in Australia.

Mr Makin:

– That has always been the policy of the Labour party.

Mr THORBY:

– That is not so. The Country party believes that the payment of bounties will not provide a solution of this problem, and claims that there should be an organized system of marketing that will provide for the payment of Australian parity for goods which are consumed in this country. Then no industry could bleed another white, and no group of employers or employees could unfairly prejudice the welfare of another section of the community. If that principle were accepted by honorable members on both sides, it would pave the way for the committee to approach the pressing problem of the rural industries from a. new angle. We should adopt a tariff policy which would not inflict undue hardship on any section, but which would enable all sections to increase production and work together for the purpose of increasing the credit of Australia overseas. In the past we have been beating about the bush, because governments have been afraid of offending the employers and employees in secondary industries.

Having sat in this chamber continuously since 3 p.m. yesterday, I have heard every speech on the tariff. I deliberately refrained from joining in the debate until I understood that every other honorable member who wished to discuss the tariff had spoken. I have never previously had an opportunity of hearing a full-dress tariff debate in this Parliament, and, after having heard the remarks of honorable members on both sides, it seems to me that there is room for hope that party interests will not be a dominating factor in this vital issue, which affects both primary and secondary industries throughout Australia, and the future welfare of every man, woman and child in the Commonwealth. I earnestly appeal to the Government of the day to guard against the singling out of certain industries for drastic reductions.

Mr Gullett:

– If we did not alter any duties we should never make headway.

Mr THORBY:

– I am prepared to give the Government my wholehearted support in a downward revision of the tariff, but I1 protest against the Government singling out small industries for severe reductions of duties out of all proportion to the benefits being passed on in other directions. The Tariff Board could submit to the Government, at short notice, a general recommendation that would enable a sweeping revision of the tariff duties to be made, if only by a percentage reduction, in order to give immediate relief. We shall never stabilize industries if the exceptionally high protection given to them by one government is to be summarily taken away by the next government. I am not a high protectionist ; I am a very low protectionist, but I submit that one government cannot rectify the mistakes of its predecessor by crucifying small industries. We have to be careful in handling these matters. When the Tariff Board declares that an industry is overprotected, those engaged in it should receive fair warning of any reduction of duties, even if that course necessitated a revision of the tariff every three months. I can understand that in order to avoid the dumping of imports governments are anxious to keep secret intended increases r>f duty, but a decrease of protection is in a different category. An industry illich has been artificially bolstered, whether wisely or unwisely, should not be thrown into confusion by a sadden reduction of duty. A wise distribution of the alteration over two or three years would cause less dislocation than would the removal at one fell swoop “of more protection than the industry could alford to lose. This is a vital principle. If the Minister for Trade and Customs (Mr. Gullett) is prepared to defend these sudden reductions, I challenge him to apply to the powerful iron and steel industry the same process that he applied to the struggling enterprise of manufacturing haircloth. If he will reduce the tariff protection on all other secondary industries in proportion to the reduction of the duties on haircloth, I shall give to him solid support. Are we to take two or three years to revise the tariff, singling out for first treatment some of the smaller and less advanced industries?

Mr Gullett:

– We have “ singled out “ 69.

Mr THORBY:

– When only a few .industries are subjected to heavy reductions of duties they do not get the compensating relief they would receive if a general reduction were made simultaneously throughout the schedule, or even if they were assured that that would be done iti the near future. The manufacturers of the reduced items have still to carry a high cost of production, which is associated with a high cost of living for their employees, because all other industries are still enjoying the extremely high protection granted by the previous Government. If it was right for the Scullin Ministry, by a stroke of the pen, to raise the duties on industries to an abnormal height, it would be equally right for the present Government to ask the Tariff Board for a general recommendation for the revision of the whole tariff, instead of making a detailed inquiry, dealing with shirt buttons this month and haircloth the next. These piecemeal reductions crucify the industries to which they apply while they are awaiting the reduction of the duties on other industries perhaps two or three years hence. I have made these remarks in all sincerity, and after carefully weighing my words, I again appeal to the Government to realize that the primary industries are in such a delicate state at the present time that they cannot wait a year or eighteen months for relief. They must have help immediately. The members of the Country party are prepared to give impartial consideration to a proposal from any source that will evenly distribute the burden of tariff protection over all the Australian people.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Is the honorable member in favour of a wheat bounty?

Mr THORBY:

– I definitely favour a flour .tax and the formation of a Commonwealth wheat pool. Nothing will distribute the financial burden that the growers are carrying more effectively than that, and it will enable them to pay a fair amount of tariff duty on the goods they consume. Several of the speakers during this debate have unfairly suggested that the farmers are demanding relief in respect of barbed wire, galvanized iron and wire netting merely because they purchase quantities of those goods from time to time. The claim of the primary producers is that every penny of tariff duty on those and other articles is gradually, but surely, passed on to their shoulders until it becomes a heavy burden upon them. Every other section is able, either through the Arbitration Court, price-fixing tribunals, or monopolies of manufacture, to pass on increased costs until eventually the whole of them rest on those engaged in primary production. Employers, employees, sub-contractors and all others associated directly or indirectly with production from the so”il are carrying the full burden of the tariff protection policy. While that system exists, every penny’s worth of food, and every shilling’s worth of clothing they buy carries a proportion of the tariff duties. Wire netting, galvanized iron, and barbed wire have been mentioned only for purposes of illustration. I could supply the committee with facts relating to the steel industry which reveal the tactics that have been adopted by the monopolists. They have deliberately set out to crucify small manufacturers who are legitimately trading, giving the benefits of their production to the public, paying full award rates, and observing good labour conditions, but, because they are not members of a combine, advantage is taken of the tariff policy to crush them out of existence by refusing them supplies at reasonable market rates. This is part of the campaign of one group to get sole control of the steel industry. These people already have power to fix prices and extort undue profits from the public; yet they are still able to demand from the Government of the day unfair and undue protection of their industry.

Mr LANE:
Barton

.The honorable member for Calare (Mr. Thorby) has unfairly charged the Ministry with seeking to tax the smaller industries for the benefit of the larger ones. Although he claimed to be speaking with sincerity, and a sense of his responsibility, and to be able to vouch for the accuracy of what he said, there is no man whom I am inclined to watch more carefully than the honorable member. He concluded his speech by suggesting that the Government is bolstering up the steel monopoly at the expense of small manufacturers. It ill becomes the honorable member to level such a charge against the Ministry. Reference was made to the agreement made by the Leaders of the Country party and the United Australia party. The intention of that arrangement was that the tariff should be revised in accordance with tlie recommendations of the Tariff Board It was agreed that, it should be dealt with by the Tariff Board. Now we are told that the whole tariff should be revised to- assist the primary producers. It was known that the Government has been so actively concerned with emergency legislation that it has not had any opportunity to proceed further with tariff revision, and their allegations are obviously unfair. Never has there been a greater misrepresentation of the actions of a government.

The CHAIRMAN:

– The honorable member is not in order in saying that another honorable member has wilfully misinterpreted the action of the Government.

Mr LANE:

– I shall at all times be willing to support any measure that is designed to assist primary producers. I believe that every man on the land should reap the full reward of his labour. But our farmers are not the only persons who are facing ruin. Our builders, both in the cities and in the country, have lost practically everything, and many are on the dole.

Mr Thorby:

– I know more about builders than does the honorable member.

Mr LANE:

– The honorable member for Calare boasts most unreasonably-. Members of the Country party should come out into ‘the open. My five and a half years in the New South Wales Parliament taught me that the covert threats and underground tactics of the Country party are unwarranted. 1 appeal to honorable, members of that party to remove the veil from their eyes, and have regard to the welfare of Australia in the widest sense. Let them have consideration for the needs of the city as well as of the country. I sincerely hope that the right honorable member for Cowper (Dr. Earle Page) will be generous in hi:treatment of the people of Australia. 1 know that he would enter into another agreement such as that which has been said to have been violated, if by doing so his party could be returned to power.

Mr Thorby:

– I rise to make a personal explanation. With due respect tr> you, sir, I draw attention to the fact that during this sitting the honorablemember for Denison (Mr. Hutchin) stated that he was. waiting anxiously to hear what was to be said by members of the Country party. The honorable member for New England (Mr. Thompson) told him that he obviously did not know what he was talking about, and that remark you, sir, declared to be unparliamentary, and considered should be withdrawn.

The CHAIRMAN:

– The honorable member for Calare has not made a personal explanation. If the honorable member has been in the chamber since the commencement of the debate he must remember that when the honorable member for Denison rose and asked for-the withdrawal of the remark to which attention has been directed, I ruled that it was not unparliamentary.

The general debate on the resolution is now concluded.

Sitting suspended from 7.40 to 9.S0 a.m.. (Thursday).

Division 2. - Tobacco .and Manufactures Thereof

Item 19 (Tobacco unmanufactured, entered to be locally manufactured into tobacco).

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

.- At the outset of my remarks upon this very important tariff item of tobacco I should like to make a personal reference. Attempts have been made during this controversy, particularly by the honorable member for New England (Mr. Thompson), to convey the impression that I am in some way prejudiced against the welfare of the tobacco industry. I think I can show very briefly that not only have I, by my actions in this House, shown no hostility to the industry, but that I have been a particularly helpful friend to it. The honorable member, I take it, has in mind the fact that when three years ago he submitted a motion for the appointment of a select committee to inquire into the tobacco industry, I opposed it on behalf of the Government. That Government, I remind the committee, included the present Leader of the Country party (Dr. Earle Page) and three others who are still members of that party. It was at the request of the Government as a whole that I opposed the motion. The Government decided that the proposal should be opposed, and as Minister for Trade and Customs, I was the Minister selected to carry out its wishes.

One other matter which I should like to mention is also connected with honorable members of -the Country party. The leader of that party was ‘ a member of the Bruce-Page Government for six years before I joined it. During that time that Government was distinguished by the great increases it made in customs duties, and particularly by the increased duties it afforded the manufacturing industries of this country. As compensation for those grants of assistance to the secondary industries, the right honorable member and his friends of the Country party took as compensation various and substantial measures of assistance to primary industries. In this connexion I recall the duties imposed on cotton, rice, the fruit industry in a comprehensive sense, potatoes, onions, and other things, covering a wide range of primary industries.

The CHAIRMAN (Mr Bell:

Order ! The Minister must confine his remarks to the item before the committee.

Mr GULLETT:

– I shall link up immediately with the tobacco duties. Throughout those six’ years the protective duty on tobacco stood at 2s. per lb. Nothing would have been easier for the right honorable member and his party, had they believed a greater measure of protection was necessary, than to have increased the duty. But right down those six years the right honorable gentleman did nothing for the industry, although he now insists that the duty should be 5s. 2d. per lb. On the other, hand, I was a member of the Bruce-Page Ministry for only ten months. During that time, broadly speaking, I made no tariff changes. On one occasion, however, the right honorable member represented to me that the Government was falling short of revenue, and suggested that I should search the schedule in order to find fields of potential revenue. I did so and the main increase I recommended - and I recommended it because of its protective incidence was an increase of the duty on tobacco from 2s. to 2s. 8d. per lb. That was my contribution to the industry.

Dr Earle Page:

– Does the Minister suggest that during the previous six years the tobacco industry was not assisted because of my personal inaction, and that it was thereafter assisted because of his personal action? That is a very remarkable position to take up.

Mr GULLETT:

– Precisely. I would not have referred to this matter at all but for the propaganda which he has been circulating throughout the country, and the speeches and utterances which have been made, particularly by the honorable member for New England, during recent months. I mentioned it only as a practical demonstration of my sympathy with this industry, my faith in it, and my desire to be of practical assistance to it.

Let me say at once that this item, and the whole of the circumstances surrounding the change, are unique in the history of tariff amendments. This amendment is not being made merely in the interests of revenue, or merely and solely in the interests of production. It is considered vitally necessary by the Government on three grounds. First, on the high and important ground of finance; secondly, on the basis of sane tariff making; and thirdly in the best interests of the tobaccogrowers. We claim that in this action we have given full consideration to all three points. We claim that the action we have taken is not only desirable in the interests of finance, but that it is imperative, unlessthe finances of the Commonwealth, and of Australia generally, are to be menaced by positive collapse. We also say that the change we have made still leaves to the industry an extraordinarily high measure of protection, and that the change, and the manner of its making, will do more for it than has been done by any adminis- t ration all down the years in which the industry has existed. I shall not labour the question of finance, because I hope that the Treasurer (Mr. Lyons) and the Assistant Treasurer (Mr. Bruce), at a later stage, will pay particular attention to that feature ; but I should like to make a brief reference to that aspect of this proposal. The old rates, as honorable members know, were an import duty of 5s. 2d. per lb. and an excise duty of 2s. 4d. per lb. In other words, imported tobacco paid to the revenue a total a mount of 7s. 6d. per lb. while locally- grown tobacco contributed 2s. 4d. per lb. There is taking place at. present a great, and, I think, a very importantchange over from imported to Australian leaf; but on that basis - the imported leaf paying 7s. 6d., and the local leaf only 2s. 4d. per lb. into the revenue - on every additional pound of Australian-grown tobacco on which excise duty is paid, the revenue loses 5s. 2d. per lb. ‘ That is at the base of the Government’s decision, and shows the necessity for this proposed alteration. We greatly desire this change over, but it must take place on a basis which the Government can afford. It can not be permitted to take place on a basis which threatens the very foundation of the finances of the country at the most critical time in its history.

Last year’s crop was less than 2,000,000 lb., and the excisable production on a low basis for this year is estimated at 6,000,000 lbs. In other words, the gain this year in excisable Australian tobacco will be 4,000,000 lb., and the loss of 5s. 2d. on each pound represents an annual loss of £1,000,000 to the federal revenue, as that tobacco goes through the process of manufacture. It would, we estimate, mean approximately £1,000,000 in the next financial year, with the extraordinary expansion that is taking place in the industry, it would probably mean £2,000,000 in the following year, and up to £3,000,000 the year afterwards. Expressing it in another way, taking the average Australian crop for ten years at 800 lb. an acre, one is safe in assuming that for every additional acre of Australian tobacco, the loss to the revenue would be £150.

I need not remind honorable members that Australia’s finances to-day are in a desperately perilous state. That is true not only of the finances of the Commonwealth, but those of the various State Governments as well. If Commonwealth finance is weakened as it would be - almost shattered - by this further loss of revenue, it means not only the collapse of our credit, but the collapse of the credit of the States, and every other public authority in this country. When we consider our diminishing revenue, a further reduction in revenue cannot be countenanced. The tobacco revenues at present amount to about £6,500,000. They have proved unique. During the present financial crisis they have stood up to the depression. It is true that the poundage of tobacco smoked has decreased, but the increased revenue has been obtained by increased duties and the Government cannot imperil that £6,500,000 a year, or any substantial portion of it. If we lost £1,000,000 during this financial year, what would be the next step? There would have to be either an immediate drastic and brutal curtailment of social services and government payments generally, or a serious increase in taxation. It would inevitably mean a reduction in pension rates and even bring the question of interest payments again under consideration. If that were not done the Government Would have to consider an increase of land tax, sales tax, primage duties, or taxation of that kind in order to make up the loss of these millions, which must result if these duties are altered. We are all concerned in this great financial crisis that is upon us, and I am sure no honorable members are more concerned than are my friends of the Country party, who have so resolutely opposed this reduction. f shall now refer very briefly to the condition of the industry during the past year, and as it will be when this change is made. If I cannot establish to honorable members of the Country party that, even with this reduction, of the duty from 5s. 2d. to 3s. per lb., and an increase of the excise from 2s. 4d. to 4s. 6d. per lb., tobacco-growing is still the most prosperous and most profitable of all Australian rural industries, that it is the best protected of all, and has the brightest future of them all, I shall abandon the case.

Last year the Australian tobacco crop was less than 2,000,000 lb. When the duty was increased to 5s. 2d. per lb. there was an extraordinary expansion of the acreage planted until it came up to something like 20,000 acres. I am not able to say with certainty what this year’s crop will be, but our latest estimate, carefully made, is that it will be slightly under 10,000,000 lb. On later information I am inclined to think that it may fall even below that figure, because drought conditions in Queensland, and excessive rains in Victoria at the latter part of the growing season, have been unfavorable. We have, however, increased our production from 2,000,000 lb. to something like 10,000,000 lb. With a duty of 5s. 2d. the growers last year obtained an average of 3s.’ per lb. This year they are guaranteed 2s. 3d. per lb. up to an output of 7,350,000 lb. Various manufacturers have given a written undertaking that they will pay not less than an average of 2s. 3d. per lb. up to that maximum.

As the matter is now being tested, .1 am afraid that I must repeat what 3 have already said,- that tobacco-growing at 2s. 3d. per lb. is extraordinarily profitable to the grower. As a money spinner it has no rival among the rural industries of Australia. Taking the average production per acre over the last ten years as 780 lb., at 2s. 3d. per lb. there is a gross return of £S7 15s. per acre. The Tariff Board reports that if all the labour employed is hired, the cost is £35 per acre. There is, therefore, over and above the cost of wages, a balance of £42 los. per acre. But we know that the great bulk of tobacco-growers are individuals on small blocks; they do nearly all their own work, and, therefore, reap the greater proportion of the £87 15s. This return is far ahead of every other rural return in Australia, and not because of the present depressed prices; it is ahead of every other rural return that has ever been obtained in Australia, except, perhaps occasionally, in respect of onions and potatoes during seasons of shortage.

Mr PROWSE:

– It may be so on the basis of acreage, but it is not so on the basis of the return for a man and his family, which is the light in which the matter should be regarded.

Mr GULLETT:

– We are all in agreement that one man can work a block of five acres with very little labour. A tobacco-grower on five acres gets a gross return of £438 15s. If he lives the life of a gentleman and employs labour to do all the work on his block, he gets a return of £263 over labour costs, even after the change has been made by the present Government, in the interests of national finances during these perilous times. Can honorable members in the corner say that the Government has done a mean thing to the tobacco-grower? The right honorable the Leader of the Country party (Dr. Earle Page) smiles. I marvel at that when I remember that for six years he was responsible for the control of the finances of the Commonwealth. If the Government, of which he was a member, was still in office to-day, would the duty of 5s. 2d. per lb. have been imposed? Would this position ever have been created ? If he were the responsible Treasurer to-day, would he persist in the attitude he is now taking up?

First of all let me explain what the duty means in an ad valorem way. For ten years the price paid in America to growers of Virginian leaf, incomparably the popular tobacco of the world, was ls. per lb.; but last season, tobacco having shared in the slump of prices which has affected all primary industries, the price offered was from 6½d. to 7d. per lb. American tobacco, paying a duty of 5s. 2d. per lb. could be landed in Australia after paying cash, insurance, freight and exchange and put in stores at ls. per lb. A duty of 5s. 2d. per lb. would, therefore, be over 500 per cent, ad valorem. On the basis of 3s. per lb. it is 300 per cent, ad valorem. I am not decrying Australian tobacco when I say that if it were put into overseas markets’ in competition with American, for which the growers gets 6£d. per lb., I do not think that it would bring more than 6d. per lb. With so much dark leaf it is not to be compared with Virginian tobacco. On the basis of a return of 6d. per lb. a duty of 5s. 2d. per lb. would be 1,000 per cent, ad valorem; on the basis of 3s. per. lb. it is 600 per cent, ad valorem.

To those honorable members in the corner, whom in the past I have regarded as allies in tariff making, and to whom 1 look for future support and co-operation to the same end, I offer the advice that they should not put themselves into a hopelessly, inconsistent position with, regard to tariff revision. I ask them not to take a step which will hold them up to ridicule when in future they suggest a downward revision of tariff duties. That revision is bound to come. I can assure the committee that it, will be ,lon£ impartially, disinterestedly and without prejudice or favour towards any industry, the need for a general ‘reduction of costs in order to make it as profitable as possible to export our produce alone being recognized. That task will be under- taken as expeditiously as possible and to the best of my capacity. In the meantime I ask honorable members not to do anything which may possibly bring into contempt any one who afterwards talks of excessive duties in the Australian tariff schedule. If a duty of 5s. 2d. per lb. on tobacco can be defended, notwithstanding its extravagant height, and the position of the national finances, every other duty now standing in the tariff schedule can be a thousand times more strongly justified. Unless honorable members in the corner are deliberately partial to the tobacco-growing industry, if they vote for the retention of a duty of 5s. 2d. per lb. on tobacco, they cannot lay a finger on a single ‘ tariff item in the Scullin schedule. Honorable members opposite generally, should vote with their eyes upon not one tariff item, but the financial position of the Commonwealth. A vote against this item may be regarded as a vote against the whole of the steps the Government has taken to remedy the financial position, among which steps were the laws’ directed against the State of New South Wales, which were passed last week.

Honorable members contend that an alternative scheme will maintain the wide measure of protection given by the Scullin Government to tobacco-growers, and at the same time preserve the revenue. I have before me the scheme submitted by a deputation a few months ago to the Prime Minister and myself. I understand that the honorable member for New England proposes to submit it to-day as- an amendment. It was endorsed, I know, by a meeting of the Australian Tobacco Growers Association, held in Melbourne on the 19th April, but yesterday Mr. Sambell, Secretary of the Victorian Tobacco Growers Association, placed in my hands an alternative scheme which seems to suggest some apprehension among those interested in regard to the scheme adopted by the Australian association as a whole. Neither alternative will carry out what it is claimed it will do; neither will save the revenue position. Under the former, the duty is to remain at 3s. per lb., but there are to be two excise rates - 5s. 4d. per lb. on imported tobacco when manufactured, and 3s. 4d. per lb. on Australian tobacco when manufactured. The total impost on imported tobacco would therefore be 8s. 4d. per lb., and that on Australian tobacco 3s. 4d. per lb., leaving a margin of 5s. per lb. The Government cannot accept this proposal for two or three reasons. The first, is that we cannot see our way at the present moment to increase the total impost on imported tobacco for fear that .we may increase the load upon tobacco beyond its capacity. Imported tobacco is already carrying 7s. 6d. per lb., and producing a revenue of something like £6,500,000 a year, but somewhere there is a breaking point as we have found in regard to almost all our excise duties on wine, beer, spirits, and so> forth. The level is apparently too high and the excise revenue has collapsed. In the interests of our national finance we cannot run the risk of a similar collapse in respect of tobacco.

Therefore, in the interests of our financial position we are opposed to increasing beyond 7s. 6d, per lb. the total impost on imported tobacco. Those who arc behind this proposed change suggest that the varying excise, of 5s. 4d. per lb. on the imported leaf, and of 3s. 4d. per lb. on the Australian leaf, would return the same amount of revenue next year. It is true that, on an Australian production of 6,000,000 lb., the revenue would be the same, assuming - and it is a very doubtful assumption - that the increase of Sd. per lb. on the imported leaf did not have the effect of diminishing the consumption of tobacco generally. But the reason that we cannot accept this proposal is that we are not at all sure that this year’s production of excisable Australian tobacco will not exceed 6,000,000 lb. I am quite confident that next year the weight will be considerably greater than that figure. I have gone very fully into this matter since I last spoke in this chamber, and as a result of my investigations, confidently believe that within three years, Australia will be producing the whole of its tobacco requirements, with the exception of what is necessary for blending purposes. With a production of 6,000,000 lb. the loss to the Government would be only £16,000. But if and when the Australian excisable tobacco amounted to 7,000,000 lb. we should lose £116,000; and a production of 8,000,000 lb. would mean a loss of £216,000. By every 1,000,000 lb. that the production increased, the revenue would lose to the extent of £100,000.

Mr Gibson:

– What will be done in three years time, when the whole of the tobacco required in Australia is produced locally? Will the excise have to be increased?

Mr GULLETT:

– Of course. This touches the very heart of the matter from the point of view of the producers. I have no hesitation in saying that the only factor which has kept Australian tobacco out of consumption in the years that have gone is that it has not been popular with smokers. Undeniably, they would not smoke it on account of its quality. So long as that relatively low quality continued, it would not carry a fair impost. The reason that honorable members are compelled to plead for an excise of 3s. 4d. per lb. is that, if the rate were substantially higher, and the price increased accordingly, it would be lifted above the level of a very cheap tobacco, and no smoker would buy it. I say without apology that we cannot afford to encourage the growing of inferior tobacco thai will not return a substantial revenue to the Treasury. We want this change over, but at the same time every possible step must be taken to improve the quality of leaf so that it will stand up to an adequate impost in these bad times. Therefore, as a first step, we have increased the excise on Australian tobacco this year from 2s. 4d. per lb. to 4s. 6d. per lb. We believe that we are justified in taking that step. The very fact that the manufacturers have made huge contracts to purchase it proves that we are justified. There has been a remarkable improvement in the quality of Australian leaf during the last two or three years. I am not able to say what will be the present year’s percentage of what is known as bright leaf; but I know that in 1929 it was only 20 per cent., and that last year it made a remarkable advance to 35 per cent. That seems to indicate that after long years of endeavour many of the problems that have baffled both the growers and the experts, have been solved. I trust thai not only will the quality be still further improved, but ako that production will be increased. “We believe that the industry is able to carry an impost of 4s. 6d. per lb. this year; otherwise, we should not have taken that step. The manufacturers hold that belief, or they would not have contracted to .purchase 7,250,000 lb. of local leaf, especially as in no previous season have they bought more than a quarter of that quantity. I maintain that the quality will never be raised by a wildly extravagant and unnecessary margin of duty.

What have been the arguments of honorable members in the corner during the last eighteen hours? Every one who has spoken has very properly urged that excessive duties make for inefficiency, and that a. reasonable duty makes for the highest attainable efficiency. I apply their arguments to this industry. No commodity in Australia, which enjoys a high protection comparatively with a similar commodity produced overseas, contains such a large proportion of inferior quality as does tobacco; and no commodity is so easily and immediately capable under the urge. not of a mean duty, but of a fair one, first of considerable improvement in its quality, and next of a substantial advance in the profit that it returns, not only to the producers, but also to the nation as a whole.

If we proceed along tho lines that have been laid down by the Government, wecan fully safeguard the revenue, and possibly, improve it. We are under the grimmest necessity of raising revenues where we can ; and I submit that from no quarter can it. be obtained so easily, and with less protest than from the Australian smoker. It may be that he is in an unfortunate class; but he is a very cheerful taxpayer under the heavy burdens that are imposed in these days of diminished income. If all that is claimed for this industry is correct, surely it will not be satisfied with such a contemptibly small market as is open to it in Australia! Those who believe in the industry, and are ambitious concerning it, must aim at larger markets, such as those that are enjoyed by other primary products overseas. There is a great potential market for Australian tobacco ; but the truth of the matter is that, if the present quality of leaf, including the bulk of the dark tobacco, were exported, it would not be saleable in the British market.

Mr Riordan:

-. - That is not the case.

Mr GULLETT:

– The British market is the most fastidious in the world. I agree with the honorable member for Kennedy (Mr. Riordan) that the leaf produced in North Queensland, would sell there. If in that State they persevere along the lines that have so fat been followed, and we are limited to the Australian market, the result may easily be that the Queensland producers will put entirely out of business those who are growing tobacco in the southern States.

But let me revert to the prospects of exporting. In the British tobacco impost, there is an advantage to Empiregrown tobacco of 2s. per lb. That does not mean that 2s. per lb., or anything like it, is added to the value. That 2s. is on the ultimate manufactured tobacco, which ranges in price from 15s. to 30s. per lb. Canada is sending large quantities of tobacco to London. I mention that fact with a view to showing honorable members the position that is occupied by Australian growers. Last year Canada exported to Great Britain 6,000,000 lb. It could not have sold that quantity if the leaf had not been light and good. The total price received, including the preferential gift, was ls. 7d. per lb. I am not advocating that price in Australia. It is apparent, however, that in Canada., even at that price, the industry is a flourishing and progressive one.

I shall now refer briefly to the second alternative scheme that was put forward by the Secretary of the “Victorian Tobacco-growers Association within the precincts of this chamber last night. 11 is in reply to the point that I took in regard to the old scheme, that it would not safeguard the revenue as the total excisable tobacco rose above 6,000,000 lb. There is no more influential and no better-informed individual than Mr. Sambell associated with the Victorian tobacco-growing industry. It is interestinK to sec the point that he reaches in his endeavour to preserve a protective margin and at the same time to safeguard the revenue. His proposal, he has informed me, has the backing of the Victorian Tobacco-growers Association. As the members of that association are also members of the Australian association, which only the other day advanced a different scheme, it would appear that the growers themselves are experiencing difficulty in performing the miracle of preserving a high duty and at the same time safeguarding the revenue. This scheme proposes an import duty of 3s. per lb., and the dual excise rate of 5s. 6d. on the imported leaf and 3s. 9d. on the locally-grown tobacco as a starting point. That carries the Australian excise from the Scullin rate of 2s. 4d. to 3s. 9d. per lb. in one jump, and brings the growers appreciably nearer to our rate. That seems to indicate the inevitability of the attitude which the Government is adopting. The proposed total impost of 8s. 6d. per lb. on the imported leaf has the objectionable feature that it would keep out a. substantial quantity of imported tobacco, diminish smoking generally, and adversely affect the revenue. It is claimed that the Australian impost of 3s. 9d. per lb. in the first year would actually mean a gain to the Government on an excisable product of 6,000,000 lb. of £175,000. I definitely challenge that. The scheme, if adopted, would involve a substantial increase in the price of all tobacco, and unquestionably a falling off in consumption. When the Australian tobacco production reached 10,000,000 lb. of excisable leaf we should be losing £175,000 a year. The author of thi3 scheme, however, definitely contemplates a further increase of 3d. per lb. in the excise on Australian leaf at a certain point, bringing it up to 4s. and an additional 6d. per lb. when the production of excisable leaf reaches 10,000,000 lb. That .would bring the excise on Australian leaf to 4s. 6d., which is the proposal of the Government. This comes from the growers themselves. It is only a matter of when this should be done.

Mr Forde:

– What is the margin of preference for the Australian leaf?

Mr GULLETT:

– At’ the outset, under Mr. Sambell’s scheme, it is 4s. 9d. per lb., but that would diminish unless it IVa: desired to increase the import duty. This brings me to another phase of the problem. As I have already told the committee, the production last year was in the vicinity of 2,000,000 lb.; this year, it will be in the neighbourhood of 9,000,000 or 10,000,000 lb. This remarkable increase could not possibly go into consumption within the next twelve months. I doubt that the Australian smoker could possibly be induced to smoke the whole of this new green leaf, and I put it to honorable members that, but for the Government’s intervention in the interests of the growers, the industry in its then disorganized condition would have been in a most unfavorable position. Until a couple of months ago, those associated with it in the various States had not the vaguest’ idea what the total production was likely to be, and since the Australian tobacco manufacturers had never previously purchased more than 2,000,000 lb. in any one year, it is highly improbable that, but for the Government’s action, they would be prepared to absorb 10,000,000 lb. I therefore, with the completest confidence, and after having given the position the closest study during the last two or three months, affirm that but for this alteration in the duty, and the Government’s intervention the Australian tobacco-growers this year would not have obtained 2s. per lb, or anything like that figure for their crop. Indeed, I doubt very much that more than one-half of it would have been sold, because, as I have explained, no steps were being taken for its disposal or for a carry-over for maturation purposes, so as to improve its quality, and make it popular with the Australian smoker. This Government moved decisively to ensure the sale of as much as possible of the total crop at the reduced price, and in that way it safeguarded the position of the growers. To this end, we were instrumental in making an agreement with the manufacturers for the purchase of no less than 7,250,000 lb. of this year’s crop.

Mr Maxwell:

– Do members of the Government smoke Australian tobacco?

Mr GULLETT:

– I am glad of the interjection from the honorable member for Fawkner (Mr. Maxwell). I invite those honorable members present who smoke Australian tobacco to indicate their preference by holding up their hands. Apparently there is only one. although the majority of honorable members are seasoned smokers.

Mr Hill:

– Possibly we smoke Australian tobacco without knowing it.

Mr GULLETT:

– If honorable members who are in opposition to the Government’s proposal are sincere In their preference for the Australian tobacco, let them to go into any tobacconist’s shop and declare that they want the pure and unadulterated Australian product. If action by this Government had been delayed until within a few weeks of the time when the crop was to be marketed, because of the known over-production it would only have been necessary for buyers to stand off for a week or two, and they could have bought millions of pounds at almost any’ price they liked. It would have been the old story, so. familiar to our primary producers, of a glutted market and low prices. No one knows this better than my honorable friends of the Country party, and I repeat that the Government, by its action, has maintained prices for growers this year substantially higher than would have been obtainable under the old tariff rate.

Mr Forde:

– Will the Government give consideration to the scheme put up by the secretary of the Australian Tobaccogrowers Association?

Mr GULLETT:

– We have given consideration to every scheme that has been placed before us. The Government’s proposal is the greatest individual grant in aid for the tobacco industry ever made since it was established in this country, because, for the first time, as the result of the Government’s intervention, the manufacturers will take at least 4,000,000 lb., and probably more, of this year’s crop for proper and scientific maturation. No longer will this tobacco be thrown on the market in an immature state, as it was last year. The principal company concerned in the agreement - the British-Australasian Tobacco Company - has entirely recast its tobacco policy. This year it will purchase 6,000,000 lb. of Australian tobacco, and carry over 5,000,000 lb. for maturation purposes. This will mean that, within two or three years, if the Australian growers continue to improve their product, we shall have great quantities of properly seasoned and matured Aus tralian’ tobacco going into consumption. Practically the whole of the Australian market will be in their hands. I apologize for occupying the time of the committee at such length, and I appeal to honorable members in all parties to support the Government’s proposal on three grounds - (1) that it is necessary to safeguard the financial position; (2) that it represents sane tariff making; and (3) that it is in the best interests of the growers and the industry as a whole.

Mr FORDE:
Capricornia

– We have just listened to an extraordinary speech from the Minister, who imported considerable heat into the discussion of a subject that should be considered deliberately and calmly. There was no justification for his personal attack upon any honorable member of the committee who happens to champion the case of the Australian tobaccogrowers. I admit, however, that I was interested in his historical review of the industry, because it demonstrated clearly the fact, that the Leader of the Country party (Dr. Earle Page) was for nearly seven years a member of a government that made no attempt to give to the tobacco industry the protection afforded it by the Scullin Administration. Apparently, the Minister deplores the fact that there has been an extraordinary expansion of the industry. Surely that is what we all look for. Prior to the duties imposed by the Scullin Administration, the protection afforded was insufficient, and the industry languished. It is not true, as the Minister said, that it failed because of the unpopularity of the Australian product. The simple truth is, it was making no headway under the old duties. I was not impressed with the Minister’s references to the alternative scheme submitted by a deputation of growers that waited upon him and the Prime Minister (Mr. Lyons) at Canberra. He dismissed it by saying that it would not yield the revenue necessary to safeguard the finances. I challenge the Government . to show that it cannot introduce an alternative scheme that will yield the necessary revenue, and at the same time maintain the same measure of protection to the tobacco-growing industry. It is sheer nonsense for the Minister to say that no sound alternative scheme has been put forward. The truth is, this Government does not want a sound alternative proposal.

I was terribly disappointed that the Minister should have decried this great Australian industry which was put on its feet by the preceding Government. Apparently this is one of the industries in respect of which, in connexion with tariff protection, the Minister intends to follow the Tariff Board’s report, although in a statement by him published in the Queensland Daily Mail on the 23rd March, 1931, he said this -

I will not adopt a Tariff Board recommendation in favour of a reduction that may cause unemployment, if I can avoid it.

It is certain that the recommendation of the Tariff Board in favour of reducing the protection to the tobacco industry will throw out of employment large numbers of people who, to-day, are engaged in that industry which, as I have shown, was placed firmly on its feet by the Scullin Government. Immediately upon taking office we considered the possibility of assisting primary industries, and came to the conclusion that tobacco-growing was one of the most promising, because at that time the consumption of Australian leaf was relatively low and we were convinced that, if properly developed, it could be expanded, and would give employment to a large number of Australian people. To show the necessity for some stimulus being given to this industry, I point out that in 1915-16, of the tobacco leaf consumed in Australia 13.79 per cent. was Australian grown, whereas in 1928-29 it had fallen to 5.11 per cent. The industry was languishing because the BritishAustralasian Tobacco Company preferred the imported leaf. The building up of the industry in Australia, as a result of the action taken by the Scullin Government, led to the formation of additional companies to compete with the combine. Previously it was difficult to induce additional manufacturers to enter the field. The Scullin Government did not act hastily. In 1930 it appointed a Select Committee, comprising representatives of all parties in this Parliament, to inquire into the whole of the tobacco-growing industry. That committee visited practically every tobacco-growing area in Australia, which is more than the Tariff Board has done. On the 1st July, 1930, it presented a report in which it stated that an import duty of 3s. per lb. did not give adequate protection to the local industry, and consequently it recommended the granting of increased protection. Following that recommendation the duty on tobacco was increased from 3s. to 3s. 6d. per lb. on the 9 th July, 1930. Towards the end of that year the import duty was further increased to 5s. 2d. per lb. on foreign leaf, and the excise duty was placed at 2s. 4d. per lb. on both foreign and Australian leaf. The result was a remarkable expansion of the tobacco-growing industry in Australia. This matter of import and excise duties was also referred to the Tariff Board for investigation and report ; indeed all matters affecting duties were referred by me to that body when I was Minister. I do not say that I always waited for its recommendation before acting; but its recommendations were always carefully considered. The Scullin Government believed that it was the responsibility of the Government of the day, not of the Tariff Board, to decide what rates of duty should operate; it regarded the Tariff Board as a valuable advisory body. When that board was first constituted it was intended that its reports were to be for the Minister only; but later, they were made available to Parliament - a practice which I think was wise. No government is obliged to follow the recommendations of the board. That would mean putting the Tariff Board above the Government and above Parliament. The present Minister (Mr. Gullett) some time ago said he would not follow any recommendation of the Tariff Board which meant throwing men out of work if he could avoid it, and for that reason I did not expect him to follow the board’s report in this case.

The Minister, who is pledged not to interfere with private enterprise, has entered into a secret arrangement with the tobacco combine to pay an average price of 2s. 3d. per lb. for Australian leaf for this year instead of the average price of 3s. per lb. paid last year. When 1 was Minister considerable pressure was brought to bear on me by tobacco companies and persons representing them to alter the duties. It was represented to me that hundreds of workmen would be thrown out of employment if the import duty on foreign leaf were not reduced. I, however, remained adamant. The present Minister has made a guess as to the present year’s crop, which he estimates at 10,000,000 lb. ; but assuming there will be not more than 6,000,000 lb., which is more likely to be the case, a reduction of 9d. per lb. in the average price means placing £225,000 in the pockets of the combine at the expense of the growers.

Mr PROWSE:

– What profit did the combine make last year?

Mr FORDE:

– Its profits last year amounted to £1,000,000. It will be seen, therefore, that the price of tobacco to the consumers in Australia could be substantially reduced, and the same price be paid to the growers as last year without any injury to any one. The profits are made, not by the growers, but by the combine. In the event of an inquiry being instituted into the tobacco industry, it should be directed chiefly towards the profits of the combine. The action of the Minister in entering into a secret arrangement with the tobacco combine, to the detriment of the growers of tobacco, is reprehensible. Not one representative of the growers’ organizations was consulted about the reduced price.

The question also arises whether the 2s. 3d. per lb. agreed upon is to be the average price or the maximum price. The Minister said that it was to be an average price; but I have been informed by growers that this year they have received 2s. 3d. per lb. for their best leaf, and lower prices for leaf of second and third grade. The returns to the growers this year will be considerably less than last year, while the combine will benefit. The Scullin Government protected the Australian tobacco-growing industry with a view to creating further avenues of employment for our people. That’ object was achieved, for. in the Mareeba and other districts in Queensland, as well as in the tobacco-growing districts of the other States, there is practically no unemployment. Growers have placed orders with Australian builders for the erection of flue-curing kilns, and Australian manufacturers are supplying farming machinery and other articles to them. All sections of the community share in the prosperity which the’ Seullin duties brought about. That Government, as well as the tobacco-growers, recognized the right of the Crown to receive revenue from the industry, and- they did not object to the Government receiving £6,500,000 each year from that source. The Scullin Government also recognized that as consumers of tobacco turned more and more to the Australian leaf, there would have to be a readdjustment of duties in order to maintain the revenue and the same margin of protection as before.

The tobacco duties formed an important feature in the last federal election campaign. The leader of the Nationalist forces in Queensland, Sir William Glasgow, who was a member of the BrucePage Ministry, informed the electors, through the press, that -

The United Australia party favours retaining the duties against tobacco grown outside Australia, and also favours a reduction of the local excise to cheapen the cost to the consumer, and thus increase the consumption of Australian-grown tobacco

The honorable gentleman promised not only to maintain- the then existing import, duties; he also said that the excise duties would be adjusted in order to reduce the cost to the Australian consumer, and thus increase the consumption of the Australian product. That was a reckless promise, but it served its purpose. That is an instance of downright political dishonesty, for no doubt Sir William Glasgow made that promise with the full consent of the present Prime Minister (Mr. Lyons). The Retail Tobacconists Association of Queensland recently issued a circular notifying the trade that the price of tobacco was to be increased immediately after the excise duty was raised; and now the price of Australian tobacco in Queensland is. almost as high as that of the imported leaf. In view of the prejudice which exists against the locally-produced article, it is obvious that the imported tobacco is given an advantage. In order to establish the tobacco-growing industry on n satisfactory footing in South Africa, the Government there imposed an embargo on the importation of tobacco. Its action was justified as a means of cultivating a taste for the locally-grown leaf.

The Government should bring in an alternative scheme of its own if it cannot accept the alternative scheme submitted by the growers. It should be willing to do something to enable the Australian industry to compete effectively with tobacco grown in other countries by black labour. A meeting of the Victorian and Australian tobacco-growing associations held in Melbourne within the last fortnight unanimously endorsed the alternative scheme placed before the Minister for Trade and Customs. One of the principal speakers at that meeting said -

Just now every lb. of Australian leaf manufactured paid into the revenue 4s. Cd., twice as much as the price fixed by Mr. Gullett to bc paid to the grower. There was a strong probability that instead of an incense in the tobacco production next season, there would be a shortage. Already the amended tariff schedule had resulted in prices of ls. to 2s. Sd. per lb. less for tobacco made from the local product.

If that statement is correct, an average drop of ls. per lb. on 6,000,000 lb. of tobacco would mean a saving of £300,000 to the combine, and a corresponding loss to the growers, because of this Government’s intervention. On page 16 of the Tariff Board’s report appears the following :-

If the duties now in operation, namely, 5s. 2d. per lb. on imported leaf and 2s. 4d. per lb. excise on manufactured tobacco were retained, the net revenue would not fall below £ (i,500,000 until the production of leaf in Australia exceeded 6,000,000 lb. per annum.

All this talk about the loss of millions of pounds of revenue this year is so much moonshine. Last year only 2,000,000 lb. of tobacco leaf was produced in Australia, and this year, because of a drought in Queensland and wet weather in Victoria, the crop will not be up to expectations. It is fairly certain that not more than 6,000,000 lb. of tobacco will be produced in Australia this year. The Tariff Board states that -

Three shillings per lb. represents an ad valorem equivalent of 300 per cent, to 500 per cent, on the f.o.b. price of tobacco in the United States of America.

The fact that tobacco leaf is so cheap in America makes it all the more necessary to afford effective protection here. On page 12 of its report, the following statement appears : -

The quantity of Australian-grown leaf will continue to increase unless the industry is exposed to crushing competition by the removal of the duty or its reduction to a figure that will not constitute adequate protection.

We want the local production to increase. Surely honorable members are unanimously of the opinion that we should develop this industry with a view to assisting our favorable trade balance and providing work for our people. The Minister said that unless the Government intervened in this matter, there would be over production this year. His audacity amazes me. As a result of the action taken by the Scullin Government with respect to these duties, three or four buyers have been chasing up the growers in order to obtain supplies, instead of one buyer picking the eyes out of the crop. Even if the production this year should reach 10,000,000 lb., as the Minister assumes, consumption will be in the vicinity of 16,000,000 or 17,000,000 lb. His references to over production are unjustified. The action he has taken is to cover up an arrangement with the British-Australasian Tobacco Trust to purchase the crop at an average price of 2s. 3d. per lb., as against 3s. per lb. last year. The statement of the Minister with respect to the approximate loss per acre is, apparently, based on the Tariff Board’s report, which states that “ it is contended that for each acre put under tobacco in Australia, there will be a loss of revenue of approximately £85.” The Minister might as well argue that on every pound of butter we produce, there is a loss of revenue, of 6d. per lb., which, on the local consumption of nearly 200,000,000 lb., would, on the same basis, be a revenue of £5,000,000 if we imported all our butter from New Zealand. Does the Minister suggest that we should import butter from New Zealand, instead of producing it locally and impose a duty of 6d. per lb. on such importations, even if* it meant destroying the great dairying industry? If protection is to be measured from a pounds, shillings and pence view-point, we should certainly obtain a large revenue. The contention of the Minister in this instance is that we should import goods and collect duties a* revenue.

Mr Scullin:

– Where would we get the money to pay for the imports?

Mr FORDE:

– Exactly. The Minister has suggested that as a result of over production the crop may have to be stored for two years. If a substantial crop is taken off this and next year greater maturation will be possible than would otherwise be the case. At present, the growers are in a most unfortunate position. Many of the growers utilized the little money they had at their disposal to purchase and clear land, erect fences and flue-curing barns, and build a shack in which to live. They have been given credit by the storekeepers and others on the assumption that the protection afforded to this industry will be allowed to continue. The tobaccogrowers in Queensland were justified in expecting the old duties to remain, because the campaign leader of the United Australia Party in Queensland said that it was the policy of that party at least to continue the import and excise duties then in force. Instead of doing so, the Government has increased the excise on Australian leaf from 2s. 4d. to 4s. 6d. per lb., and decreased the duty on imported leaf from 5s. 2d. to 3s. per lb. By giving a decided preference to foreign leaf the price of Australian tobacco will naturally be increased. Tobacco retailers in Brisbane, as well as in other cities of Australia, have already increased prices, which will naturally have the effect of retarding the progress of the Australian tobacco industry. The Government has struck a deadly blow at an important primary industry in Australia. There are other important factors which I should like to bring under the notice of the committee, but as other honorable members desire to speak, and the time is limited, I shall refrain from doing so. It was my intention to move an amendment, but I understand that one will be moved by the honorable member for New England (Mr. Thompson), which the members of my party will support. The vote on the amendment will show who are the real friends of those engaged in the tobacco industry in this country.

Mr. THOMPSON (New England)

That the item be postponed.

I submit this amendment as an instruction to the Government to withdraw the item, so that it may carefully study the proposals brought forward at a deputation of tobacco-growers which recently waited upon the Prime Minister (Mr. Lyons) and the Minister for Trade and Customs (Mr. Gullett) in Canberra. The proposal submitted by the Leader of the Country party (Dr. Earle Page) at that deputation was to the effect that the present import duty of 3s. should remain, and that there should be a differential rate of excise, viz., 3s. 4d. per lb. on Australian tobacco, and 5s. 4d. per lb. on imported leaf. This proposal is submitted with the object of maintaining as far as practicable the old margin of protection afforded by the previous Government until the present season’s crop has been disposed of. The speech of the Minister this morning can be described only as special and specious pleading. He occupied nearly an hour in repeating numerous statements which have already been made with respect to the tobacco industry. In the limited time at my disposal it is impracticable for me to. answer them all. The Minister said that, in my speeches, I had made derogatory references to him. At the invitation of the Tobacco-growers Association of Australia, I have delivered numerous speeches on this subject. In these speeches I have treated the Minister very considerately, notwithstanding the fact that many of the growers have made many sensational statements concerning him. They regard him as a bitter and implacable enemy of the industry. Although they have severely criticized his actions, I considered it my duty to place him in a somewhat better light. For instance, I said that I did not think that he was acting as a mouthpiece of the tobacco combine, but in sheer ignorance of the conditions in the industry. On previous occasions I have said that I considered that the Minister is highly prejudiced against the industry, and I ask those honorable members who heard his speech this morning whether I am not justified in making that assertion. There was nothing in his speech to suggest that he had an open mind on the subject. He cast odium upon the industry wherever possible, and inferred that it was not one worthy of encouragement.

Mr Maxwell:

– He said that the industry was improving immensely.

Mr THOMPSON:

– But he immediately stultified himself by asking every honorable member who smokes Australian tobacco to hold up his hand. He further said that the quality of the leaf produced in Australia was far below anything that could be imported.

We have to consider whether the proposition put forward by the Country party is practicable. In the first place, we have to safeguard the revenue and to protect the industry. We have also to see that the tobacco-smokers in Australia are getting a fair deal. Throughout a dramatic and eloquent speech the Minister begged the question. He did not touch upon the main points. We realize that the Government; has definitely decided to reduce the import duty from 5s. 2d. to 3s. per lb. The Prime Minister (Mr. Lyons) has declared that he intends to make it a vital issue. The Government supporters have been whipped up, and some honorable members have been brought from distant parts of the Commonwealth to vote in the division which will shortly be taken. In this instance the Prime Minister has belied his election promise that the members of the United Australia party would be free to vote as they desired on customs duties. He has gone back on his word, because the members of the United Australia party are not free to vote as they desire. The members of the Country party can simply state their case - we know that the numbers are against us - for the information of the people of Australia, and allow them to be the judges. I assure the Government that the matter is not going to rest where it is. Personally, I believe that the Government is making a stupendous blunder. It is a blunder which the Government need not make. If it is the sole desire of the Prime Minister and the Minister for Trade and Customs to safeguard the- revenue, it is the simplest thing in the world for them to get out of their present untenable position and create an entirely different feeling among the 4,000 tobacco-growers and 12,000 workers employed in the tobacco fields of Australia. If, on the other hand, the Government chooses to let the position remain unaltered, to allow it to become a running sore from now on, such a feeling will be aroused in the rural industries that, at the next election, the Government will meet with its .downfall. Peeling against the Ministry will not be confined to the tobacco-growing industry; it will spread among all primary industries, so that in a year or two when the present Government is striving to find means to undo the mischief which it is now doing, it will find the great mass of people engaged in rural industries prejudiced against it. They will gradually come to realize that a government which is not capable of protecting one primary industry, cannot be entrusted with the care of primary industries generally.

I do not wish to indulge in fireworks, like the Minister did, but I want to touch upon three points that must be considered. The first is whether the proposal which the Country party is putting forward will safeguard the revenue. Prom that point of view, the Government’s case must fall to the ground, because our proposition does not affect the Minister’s proposal to reduce the import duties, and we propose to safeguard the revenue by the simple method of differentiating in the matter of excise duties between manufactured imported tobacco and manufactured Australian tobacco. By increasing the excise duty, a revenue of £6,750,000 could still be collected on tobacco, even if the import duties were removed. If this were done it would not matter what the import duty was, for effective protection could be given to the local product through the excise. Even if we raised the import duty to the British rate of 9s. 6d. per lb. our revenue could still be safeguarded. Every pound of tobacco imported or grown locally must go through the excise funnel, at which stage the final taxation is imposed. We have, therefore, a ready means by which we can extract from the tobacco industry any revenue we wish to obtain, so long as we are prepared to consider taxation upon tobacco only as a means of raising revenue.

The Government has made it clear that it is not prepared to endorse the merits of our proposal. I have no doubt whatever that it is absolutely the right one to adopt. Every proposal we put up ia blown to pieces by the customs officials, because it is a simple matter for them to show that, based upon the quantity of tobacco we estimate as likely to be produced, the Government will not get the revenue it desires to get at the rates we propose. Nevertheless, I contend that by manipulating the excise duties on a differential basis, we could obtain whatever revenue we desire. Or we could get it wholly on the imported tobacco, or wholly on the locally-grown tobacco. Although the Customs Department declares that it is practically impossible to differentiate, it has already differentiated in this schedule, and for the first time, by imposing a duty of 5s. 2d. “per lb. on raw leaf imported for use in the manufacture of cigarettes, and a duty of 3s. per lb. on leaf imported for the manufacture of pipe-smoking tobacco.

Mr Lane:

– Is that a right or a wrong principle?

Mr THOMPSON:

– I do not know, but it must be practicable, or it would not have been adopted by the Customs Department. At any rate, in my opinion, it is sound, and that is the basis of our case. It is not, as the Minister suggests, that we want to increase the import duty to safeguard the revenue, but that we seek to differentiate in respect of excise duties between the Australian and imported tobacco in order to secure the required amount of revenue, and at the same time protect the local industry.

Mr Maxwell:

– That might have the tendency to reduce the consumption of tobacco.

Mr THOMPSON:

– The Minister has pointed out that when the cost to the consumer becomes too great, consumption declines. He says that he has already found such to be the case in respect of spirits and other liquors. It would certainly apply to tobacco if the excise were toohigh, tobacco being one of those commodities in regard to which the excise duty can be passed on to the consumer. A prohibitive excise would enormously reduce the revenue derived from tobacco, but that does not alter the present position. If no tobacco were grown in Australia, the required revenue of £6,750,000 would have to be secured by taxing imported tobacco, 95 per cent. of which is American. If no tobacco were imported, it would have to be secured by taxing Australian tobacco to the extent to which imported tobacco would have been taxed.

Mr Maxwell:

– The honorable member is assuming that the same quantity of Australian tobacco would be smoked.

Mr THOMPSON:

– Yes, because I am satisfied that the quality of the Australian tobacco has so enormously improved in the last two years, that it now compares favorably with that of imported tobacco. I have not discovered any imported tobacco, even the boasted American best, which compares with the bright tobacco we are now growing in Australia. If honorable members had taken the trouble to attend Dr. Dickson’s lecture yesterday, and see the exhibit of our raw leaf, they would no longer cast aspersions on the quality of the local product.

We consider that our proposal for an excise duty of 5s. 4d. per lb. on American leaf, and 3s.4d . per lb. on Australian leaf, is well worthy of a trial. It would only involve a loss of £16,000 this year, according to the figures given by the Minister; but we say that it would not involve any loss. In any case, if the Minister did not get all the revenue he wanted, it would be a simple thing for him each week or each month to impose an extra1d., 2d., 3d. or 6d. excise duty on the Australian or American leaf until he finally got all the money he wanted. He has a means at his command to safeguard the revenue to any conceivable extent.

The next point to be considered is whetherthe industry is protected. The Minister spent a lot of time displaying his vast lack of knowledge of the tobaccogrowing industry. I am still firmly convinced that he must have got all his information from the manufacturers, because had he gone to the growers, the men who actually know the economic conditions of the industry, he could not possibly have made the statements he did about those conditions. Since this matter was previously discussed, the Minister, without consulting the growers, has make an agreement with the manufacturers by which the manufacturers propose to buy 7,350,000 lb. of our Australian tobacco this year. At the first glance, it seems to be an acceptable arrangement, but when analysed it is seen to be one of the most disastrous steps that could ever have been taken in connexion with the Australian tobaccogrowing industry. Prior to this agreement, the growers had an open market and a chance to make terms with the buyers. They have absolutely none now. I have received a letter from a tobaccogrower - a man who took 25 men from under the railway bridge at Inverell, men on the dole, and placed them on his property as share farmers, providing them with decent employment for the last seven or eight months. The letter is as follows : -

We kept 25 men going, and employed five extra at harvesting. Without the labour of the actual growers in the field it cost us £61 per acre, to clear, make dams, build sheds and produce a crop from 22 acres, and then the frost got 2½ acres that we could not get in, in time.

Tregenna, and a Melbourne buyer, came and inspected our leaf and valued it at 2s. 3d. to 2s.6d. for the top grade leaf, which they said was the second best they had seen. If our best is only worth the average, and our best is all we have that is saleable, the growers are in a hell of a mess. Under Mr. Gullett’s arrangement, the buyers will pick out our best leaf and leave the balance on the growers hands, so that they get the best Australian leaf at about 2s. 3d., and condemn the balance. They are then allowed to import and the growers goback to the dole.

Where the average of 2s. 3d. is to come from has all the growers worried. The best plan is for the growers to be protected by the old tariff of 5s. 2d., and then start cooperative tobacco companies, in the tobaccogrowing centres, and they should be assisted by the Government as Moore of Queensland is offering.

The Government are giving the growers a rotten spin, and on top of it they make an agreement with the tobacco combine to give the grower 2s. 3d. for what the buyer cares to take, and the Government get 4s. 6d., or just twice as much net as the grower gets gross for his best leaf, or about four times as much as the grower gets for his crop, which would average about1s.

It’s not fair to get men to work night and day to produce an article from the soil, and the Government demand 4s.6d. excise duty and allow the grower to be thrashed as well, by a combine. It’s nowonder nearly all New South Wales is going on the dole.

Under this scheme the average price is 2s. 3d. per lb., yet this grower, whose leaf is described as the second best the buyers have seen this year, may obtain for his crop an average of only1s. per lb. For that return it is not possible for a man to stay in the tobacco-growing industry. He cannot pay Australian rates of pay and observe Australian conditions of labour, and obtain a return on the capital expenditure involved. Under this agreement the balance over 7,000,000 lb. will be left in the hands of the growers. That balance will have to be averaged with their total output. Thus the average price will not be anything like the 2s. 3d. per lb. specified, but nearer to1s. per lb., as this grower from whose letter I have read, has proved.

Mr Lane:

– Is it not arranged that at the end of the season there shall be a refund with respect to all leaf that does not fetch 2s. 3d. per lb.?

Mr THOMPSON:

– Not to every individual grower.

Mr Lane:

– That is what the agreement says.

Mr THOMPSON:

– That is not so. The agreement provides for an average of 2s. 3d. per lb. over the total crop. One man may get an average of 4s. 3d. per lb., and another an average of 8d or10d. per lb. The buyer will be in a position to take the best of the crop, and to say, “ We will give you an average price of 2s. 3d. for it “. Why did not the Minister make the average price for the best leaf the 3s. or 4s. per lb. which the growers received last year ? No ‘ grower in Australia expects a high average price for the whole of his crop; all that he desires is a good price for high quality leaf, and a moderate price for fair quality leaf. In many cases he is content to see left in his barn any leaf that is green and unsaleable.

Mr Lane:

– What percentage of the crop is good leaf?

Mr THOMPSON:

– I think it will be well over 60 per cent. It has taken the United” States of America 300 years to produce the wonderful tobacco about which we have heard so much. In two years the Australian grower, who perhaps is the most intelligent primary producer in the world, has practically reached that level. It must not be forgotten that tobacco is grown in America by black labour. This beautiful quality leaf that it is said can be purchased for6½d. per lb., is the product of negroes, negresses, and negro children. We are asked to allow this great Australian Government, which was going to help the primary producers, to throw into the laps of the black population of America an industry that it has taken ten years’ hard work to build up. The white workers and white farmers in Australia will not stand for that. Our population is 99 per cent, white, and it will not consent to a good white Australian industry being absolutely sacrificed by a piece of political stupidity, on the altar of a black-labour industry in another part of the world; an industry, moreover, that is buttressed by one of the most powerful and wealthy combines in the world.

I come now to the third point in connexion with the price of tobacco. The workers of this country, being hard hit by the depression, are prepared to smoke the locally-grown tobacco if they can procure it at a cheap price. But, as a result of this alteration, the price of all Australian tobacco has advanced, while that of imported tobacco has come down. Any storekeeper will admit that the extensive demand which existed for Australian tobacco a few months ago, has practically ceased. They do not now have to plead with the manufacturer for additional stocks, because they cannot sell what they already have on their shelves. The reason is, that the prices of local and imported tobaccoes have been brought together before the prejudice against the Australian leaf has been overcome. That is one definite effect which the alteration has had on the industry. I assure the com’mittee that the result will be to kill the industry next year. All that the thousands of growers in the industry to-day are worrying about is to dispose of this year’s crop at some margin of profit, so that they may get a portion of their money back. Next year, 50 per cent, of those who are now growing tobacco in Australia will not be in the industry. Therefore, the Minister’s hopes of permanency and of a maturation scheme are going to be rudely shattered. Behind this move is the great tobacco combine in Australia. It is an offshoot of other wealthy combines,’ one of which in Great Britain - Carreras - last year made a profit of £10,000,000. This combine is numbered among the few which, in the present period of depression, is making its accustomed rate of profit, which for the last few years has averaged £1,000,000 a year in Australia.

The CHAIRMAN (Mr Bell:

– The honorable member’s time has expired.

Mr PROWSE:
Forrest

.- The disturbance of the arrangement made by the previous Government in connexion with this industry, which has resulted from the intervention of the present Government, is, to my mind, a tragedy of some magnitude. This morning the Minister very strenuously endeavoured to scare honorable members who hold the view that high tariffs are detrimental to a country. The honorable gentleman said that any honorable member in this corner who condemned any other item as being too high, and yet complained that the protection in this case was too low, should not again look others in the face. I challenge him to point to any industry in Australia that is comparable with the tobacco industry. I am, and have always claimed to be, a revenue tariffist. I say that tobacco is properly a revenue item, and that, whether it be imported or grown locally, the Government should obtain from it a similar amount. I understand that the sum now involved is about £6,500,000. Is there any other protected industry in Australia that to-day returns to the nation anything by way- of revenue? There is not. Consequently, this industry cannot be brought into the same arena. When I am asked to choose between the imported and the locally-grown article, provided that a similar amount of revenue is contributed, my vote is for the local item, which employs so many thousands of Australian citizens-. I have not to twist my conscience fiscally in the slightest degree to uphold that proposition.

During the recent recess the Minister spent a great deal of time in consultation with his friends, the tobacco combine, which is one of the greatest combines in the world. I have had an association with it extending over a period of 50 years, and know how arbitrary are the methods that it has adopted. Its attitude towards the growers has been, “ We will give you so much; you can. either take it or leave your leaf on your property”. Our worthy Minister has spent most of the recess in consultation with that combine, which is still making profits amounting to millions of pounds. I do not wonder at the extent of those profits, considering what it charges for its product.

The Minister has also published his views concerning maturation, and has endeavoured to make it appear that his knowledge of the subject is considerable. He knows nothing at all about it. I am an old tobacco-grower, and was the first to mention in this chamber the necessity for maturing the Australian leaf to give flavour. I attended Dr. Dickson’s lecture yesterday, and at its conclusion asked him whether the taste of Australian tobacco would be equal to that of other tobaccoes if it were subjected to proper maturation. His reply was that it would. He said, “ As with spirits and other things, so with tobacco : If put into maturity it will develop the flavour that is natural to it “. Australian tobacco has never had a chance to go into maturity on account of the small quantities that have been purchased. In a previous statement in this chamber the Minister expressed the fear that there would be overproduction in Australia. I then said that that would be the greatest possible blessing to the Australian tobacco industry, because it would afford an opportunity of putting into maturity a considerable quantity of the locally-grown leaf. If that were done, Australian smokers would soon begin to realize that the product of their own country, when produced and treated under conditions similar to those of America and other countries, compared more than favorably with any in the world.

I want the Government to obtain the revenue that it requires; consequently I support the amendment. As production increased, extra excise should be collected.

I am surprised that honorable members should lend their support to such unfair treatment as the proposal of the Government involves. On account of the protection that was given, growers in all the States planted crops in the belief that no alteration would be made until they had sold their leaf. The axe has descended just when that stage is being reached. Large sums of money have been invested in kilns, and much of it is likely to be lost. The tobacco com bine is reverting to its old independent attitude of “ take it or leave it “.

I wish to read two or three letters that I have received from different parts of my State, and from South Australia. The secretary of the Balingup Tobacco Growers Association, writes -

I am directed to again write you, andask that the Country part should insist on the retention of the full duty on imported tobacco leaf. The arrangement made by the Government with manufacturers is quite unworkable, and of no benefit to us here. I have written to the local manufacturers (Michelides Limited) and offered to take their representative round and show him all the tobacco in the district, and they will not even reply to my letter. There is about 40 tons of tobacco here, and no buyers offering, and many of the growers are renting the land and have no other means, and have now to get sustenance.

That same gentleman wrote to me a little while ago in the following terms: - 1” might mention that in this district last year there were five men employed in growing tobacco, and this year the number is80, and the increase for next year would be still greater.

Many of these people will be thrown on the dole, the cost of which to the country the Minister has not mentioned.

The following communication comes from Bridgetown, Western Australia: -

On behalf of other growers I must thank you for the stand you took in reference to tobacco. I can assure you the Minister. Mr. Gullett, has cut the throat of a promising primary industry as far as Western Australia is concerned. Three of us here at Bridgetown have gone in for tobacco with prospect of getting a fair return for our outlay. We each have put £200 into the venture, and have just about spent the whole of the £600, and, so far, have not sold a leaf. Merchants are offering us 2s. per lb. for the leaf, so we have to cure three tons to even get our money back, and will have to spend a good deal more before we have finished. We pay men 8s. a day, and spend just on £20 a fortnight in wages. We took a big risk, and had part of crop spoilt with a hailstorm. The far-seeing Minister andhis advisers do not make any provision for such things as storms and insect pests, nor even do the)’ seem to have any leaning towards primary industries. Of course, this is a Western Australian industry; so kick it hard, Mr. Minister.

I hope that the Minister and members of the committee will take cognizance of the interests at stake in this matter. We have heard a good deal lately about repudiation, and the need for observing undertakings. As the tobacco-growers in the various States were encouraged to enter this industry they now deserve the fullest consideration from this Parliament. The following is another letter which I have received from Mr. George Smith, a grower at Busselton: -

Dear Sir-I am enclosing the letter I recently received re sale of tobacco. I have six acres of good crop and had hoped to place two tons on the market. I sent a sample to Michael ides, but he has all the Australian tobacco he requires, although he says it is a good sample.

It was on the bank’s advice I wrote Scott Henderson and Company. 1 have employed two men since last July, and during the busy time had an extra four on, but I have had to put them off on account of the state of the market. There is quite three-quarters of a ton now left to go to waste as evidently it would not pay to take it off.

Next year I had intended to plant a fair size area giving employment to twenty men. From my crop alone the Government would receive over £1,000 excise duty at the present rate of charges.

This letter was received by Mr. Smith from Messrs. Scott, Henderson and Company, Sydney -

Dear Sir - We are in receipt of your favour of 25th February, also samples of your leaf tobacco.

As we are not manufacturers of tobacco, we handed the samples, together with your letter, to Messrs. A. Nimenski of this city, who are tobacco manufacturers. We have since received a reply to the effect that they were not interested as the market was too unsettled at the present moment. We might suggest to you to get in. touch with the BritishAustralasian Tobacco Company.

Trusting you will be successful in disposing of some of your crop.

The South Australian representatives in this chamber will be interested to learn that I have also received the following communication from the South Australian Tobacco Growers’ Association: -

Dear Sir - The South Australian Tobacco Planters’ Association desires to place on record its appreciation of the fine effort you have made in the House of Representatives on behalf of the tobacco-growing industry of Australia.

Your speech in the House on the 8th inst. is fully appreciated and endorsed by this association, and has been studied by many of its members with deep interest. It. is sincerely hoped that still more strenuous efforts will be made to rectify the position, and that the industry will be given an opportunity to recover from the staggering blow received at so early a stage in its development by the enforcement of the tariff now operating.

I happen to know something about the tobacco industry, and I fully appreciate the difficulties in which our growers now find themselves through the interference by this Government with the duties imposed by the Scullin Administration-. Something has been said about the taint of eucalyptus in the Australian leaf. Dr. Dickson, who discussed this point with us yesterday, declared that there was nothing in the complaint, but said that the Australian leaf was smoked too green. Properly grown and matured it can be manufactured into the finest tobacco in the world. I am a heavy smoker, and know something about tobacco flavour. When I was in London in 1928, and later in the United States of America and Canada, I found it extremely difficult to buy a tobacco that quite suited my taste, which proves that a taste for the Australian leaf can be acquired. It is estimated that the industry already gives employment to over 12,000 persons, who, with their dependants, are now vitally affected by the reduced duties. They engaged in the. industry in the full belief that the protection given by Parliament “during the Scullin regime would stand at least for a season, and that they would not be exposed to the combine. I hope that honorable members will consider these duties impartially, and bear in mind what will be the effect of the lower tariff on unemployment. The Minister endeavoured to show that the return to the grower from five acres of tobacco was higher than from any other primary industry. Let me tell him that if a farmer gets £1 per acre from 500 acres of wheat - that area can be handled by one farmer with a suitable plant - he is better off than a man who is cultivating 5 acres of tobacco. I say, therefore, that the Minister was misleading the committee on that point. It is to beregretted that, before he made such a drastic change in the duties, he did not spend as much time in consultation with the growers as he did with the manufacturers who have never been over-anxious about the development of the industry. With proper protection, it can be so expanded as to provide as much revenue as will be obtained from these duties, and at the same time the Australian smoker will be able to obtain a better and cheaper tobacco than he is getting to-day. The

Minister also spoke of the margin of protection given to the growers under the Government’s proposal. Let me remind him that, as Australian tobacco is to-day being sold at 3s. and 4s. per lb. less than the price charged for the imported article, tariff protection is virtually nullified. If similar treatment were meted out to any other protected industry that was under-selling its competitors in the Australian market as our tobacco industry is doing, we should not hear , a word of complaint about a high tariff from the Government and those now supporting its proposal to reduce the margin of pro-, tection to the tobacco industry, which is being wrecked by the action of this Ministry.

Mr RIORDAN:
Kennedy

– The honorable member for Forrest (Mr. Prowse) bas made some very serious charges against the . Minister for Trade and Customs (Mr. Gullett). It is to be regretted that the Minister is not here to reply to him. All sections of the industry should, through their mouthpieces in this Parliament, be given an equal opportunity to state their case. The Australian tobacco industry is worth while. Doubtless, the Minister made out a good ca3e from the point of view of safeguarding the revenue, but I submit that, as the Australian tobacco industry is an important one, and is giving employment to a large number of Australian citizens, it should be adequately protected h» its initial stages. In Great Britain, the ditty on tobacco is 9s. 2d. per lb., and the revenue does not suffer. The Minister lightly brushed aside the representations made by Mr. Sambell, the secretary of the Tobacco Growers Association in Victoria, by stating that his proposal would not provide the revenue. Although a wellconsidered alternative proposal was suggested to the Minister and the Prime Minister (Mr. Lyons) by a deputation parly in March last, the details have only recently been submitted to the customs officials with instructions to consider its effect on revenue. If, as the Minister contends, tobacco-growing is a profitable industry, those engaged in it must be prosperous, and their contribution to the revenue, by way of income taxation, should more than off-sat; any loss of revenue, which the Minister claims would accrue if the Scullin tariff were allowed to remain. Furthermore, the development of the industry will ease the burden of the various governments in the form of unemployment relief.

The Minister expressed the belief that the industry will develop satisfactorily under the lower duties imposed by this Government. That is not borne out by our experience. Parliament appointed a select committee in 1930 to investigate the tobacco industry in Australia. The committee visited most of the tobacco-growing areas, with the exception of those in Western Australia and North Queensland. As a result of its inquiry, the select committee reported that 3s. per lb. was not a sufficient protection for the industry in its initial stages. The Minister has submitted certain estimates based on a yield of 800 lb. of tobacco leaf to the acre; but that is a generous estimate. Notwithstanding that at every lecture given by Dr. Dickson on the tobacco-growing industry of Australia, cigarettes made of Australian leaf are shown, which when tried are found quite satisfactory, the tobacco combine has not yet turned out a cigarette made solely from Australian leaf. The Minister bases his estimate on tobacco at 2s. 4d. per lb., and also on the assumption that as the quality of the Australian leaf improves the excise revenue will be higher, because more of this leaf will be manufactured into cigarettes. We should not lose sight of the fact that each year £1,000,000 is sent out of Australia to purchase tobacco leaf, which ought to be produced in Australia, thus giving employment to our om people. What is the use of talking about peopling our empty spaces with white Australians if no encouragement is given to the development of industries eminently suited to thiscountry? In the past, money has been obtained frond Britain with the object of increasing land settlement, but little has really been done in that direction. Tobacco-growing offers scope for further activities in the direction of land settlement. The Minister said this morning that after paying all expenses a grower of tobacco should make a profit of £213 from a five acre block. T have before me particulars supplied by a grower who obtained 3s. per lb. for his leaf. A yield of 500 lb. per acre returned him £375. The erection of barns for curing the leaf, a home for himself and family, fencing, and other expenses incurred in connexion with the planting of the crop, cost him £800. On that money he pays interest at 7 per cent., amounting to £56 per annum. During the harvesting season, he requires assistance, and, being a good employer, he pays the basic wage. It is strange that the worst employers in Queensland are wealthy men like Kidman and Angliss; but I am pleased to say that 80 per cent. of the tobacco-growers are decent employers. This man, after accepting all the risk associated with tobacco-growing, does not obtain a return of more than £6 a week for his own labour and that of his family. For that he works, not eight hours a day, or 44 hours a week; he works practically round the clock during the curing period, because, at that stage, continual care is necessary in order to get the best results.

When the Scullin Government granted protection to the tobacco-growing industry, there were only a few hundred growers of tobacco in Australia. To-day they number 4,032. Since most of these growers have a wife and a couple of children, it will be seen that approximately 16,000 persons who otherwise would be receiving the dole are engaged in this industry. Their employment in this way not only relieves the country from the necessity of providing them with the necessaries of life; they also contribute to the revenue by means of income tax payments. It must also be remembered that their product has to be taken to market by rail or steamer, thereby giving employment to railway men, waterside workers and others, to say nothing of those engaged in manufacturing the tobacco in Australian factories. Many of these other workers would also be receiving the dole were it not for this industry. The action of the Government strikes a blow at an important industry, and will result in hundreds of men being thrown out of work. During the election campaign I told the electors in the Mareeba district of Queensland that they could expect a reduction of 2s. per lb. in the price paid for their tobacco leaf should a government led by Mr. Lyons be placed in power. Sir William Glasgow who led the Nationalist forces in Queensland, Mr. Grosvenor Francis who contested the Herbert seat, as well as my opponent in Kennedy, said that my remarks were merely a votecatching scheme. At that time there were about 36 tobacco-growers in that district with many of whom I had at one time worked. They asked me after the meeting whether my prediction was merely so much political talk, or was it likely to be fulfilled in the event of a change of government. I told them that as there were only 36 of them, their vote could not influence the election greatly, one way or the other. Many of them decided to wait to see what happened in the political sphere before planting their crops. Those thrifty working men, who had saved up a few hundred pounds to establish themselves in an industry which they believed would provide them with a permanent income, have been severely hit by the Government’s action.

For some time I have been suspicious of the Minister for Trade and Customs, particularly since he contributed to the Brisbane Telegraph a series of articles dealing with the tobacco industry. If the name of the Minister did not appear at the top of these articles, one could be pardoned for believing that they were written with the object of presenting the case for the tobacco combine. Many of the points mentioned by the Minister have been answered by Mr. Paul Jones, the Secretary of the Australian Tobacco Growers Association. Mr. Jones was a member of the Select Committee which inquired into the tobacco-growing industry, he being at that time a member of this House. Honorable members know that while here he never ceased to advocate the claims of the tobacco-growers. He is still fighting in their interests. Mr. Jones lost his seat in Parliament because of promises made to the growers of Victoria that a Nationalist government would not interfere with the tobacco duties. The Leader of the Country party (Dr. Earle Page) referred to an agreement between that party and the United Country party that there should be no interference with primary production. The tobaccogrowing industry is a primary industry, and I claim his support for it. The Minister says that no promise was given to the tobacco-growers by the present Government or its supporters. That is not correct for, as I have said, Senator Glasgow made a definite promise to the growers of Queensland, as did every other Nationalist candidate in that State. The honorable member for Indi (Mr. Hutchinson) made certain promises to the electors right up till March of this year, and although his action has been severely criticized by the electors, he has found a way to get in behind the Government in order to ensure the safety of the party. The Minister for Trade and Customs (Mr. Gullett) said-

The value of local production is insufficient compared with that of other great primary industries.

The Secretary of the Australasian Tobacco-growers Association pointed out -

That that is no reason why it should be so insignificant as compared with the value of imported leaf. The value of leaf imported for the five-year period ending 1928-29, was £9,917,516, while the value of Australiangrown leaf for the same -period was £558,862.

Nearly £10,000,000 was spent on imported tobacco produced at1s. 0½d. a lb., and which can now be obtained at 6d. a lb. This is grown by labour such as the honorable member for Forrest (Mr. Prowse) suggests should be used in the production of sugar. The secretary of the association further states -

The value of an industry should not be measured merely by the money value of its production, but also by the amount of employment it gives. Regarded from this aspect, the tobacco-growing industry is more valuable than many of the other great primary industries, as it lends itself to intense culture and the employment of large numbers of men.

The Minister for Trade and. Customs also stated that -

Co-operative experiments between the Commonwealth and State governments and the larger tobacco manufacturing companies lead to a greatly increased interest in the industry, and a steady expansion.

The Australasian Tobacco-growers Association’s representative replies to that statement in this way -

The greatly increased interest is reflected in the fact that during the years of the experiment, some of the leading growers went out of the industry. The offer was made by the company in 1926 and the following official figures show how “ steady “ the expansion was: -

The Tariff Board’s report, page 5, admits “ there has been practically no expansion in the industry until the last two years.” Of the total quantity of leaf used in manufacture in1928-29, only 5.11 per cent. was Australian grown.

The Minister also stated that -

The increase of import duties to 5s. 2d. per lb. caused a rush to grow tobacco.

The official reply is as follows : -

Official figures given indicate that there was room for a speeding up with a view to growing our own tobacco requirements. The drastic alteration in duties will cause a rush to get out of the industry, but, unfortunately, this will bring financial ruin to many growers, especially the newer ones.

The Minister further stated that -

The Lyons Government agreed with the Tariff Board that the reduction of import duty to 3s. per lb. was “ adequate and in the best interests of efficient growers.”

The reply of the association reads -

A parliamentary select committee drawn from all parties, after much more exhaustive inquiry into the local tobacco-growing industry than that conducted by the Tariff Board, found that 3s. per lb. import duty did not provide adequate protection.

The Government is acting upon the recommendation of the Tariff Board, which came to a decision after a few days or perhaps a few weeks’ investigation, whereas the select committee, after hearing the evidence of those interested in all parts of the Commonwealth, said that the protection afforded was insufficient. The Minister further referred to the serious danger of over-production, and said that an unhealthy boom was in progress. I think I have said sufficient to counteract that, contention. A motion moved some time ago had the support of a number of honorable members who claimed to be sympathetically disposed towards the tobacco-growers, and, had a vote been taken at that time, the result would have been different from what it is likely to be to-day. The whips have been cracked over the Queensland representatives, who have been despatching wires asking for advice, and when they received it graciously forwarded copies of the Tariff

Board’s report as a reply to the representation made to them. Other honorable members wrote to their constituents saying that they would be willing to render any possible assistance. A majority of members of another place are opposed to the reduction; but, in the end, I suppose they will support the Government. When the adjournment of the debate on the motion to which I have referred was agreed to, further discussion was prevented. Even the mover of the amendment supported the adjournment of the debate. The Leader of the Country party (Dr. Earle Page) in this, as in other instances, has misled his supporters. It would be interesting to know what action was taken in the interests of the tobacco industry by that right honorable member when a member of the Government. The expansion of the tobacco industry during the period when the right honorable member was Treasurer was as marked as that of the new States movement ! I trust that honorable members representing such tobaccogrowing districts as the Derwent Valley, in Tasmania, Sunny Banks, in Queensland, and other tobacco-growing districts, will support the amendment moved by the honorable member for New England (Mr. Thompson).

The CHAIRMAN (Mr Bell:

– The honorable member has exhausted his time.

Mr GIBSON:
Corangamite

– It is not my intention to take up the time of the committee at this juncture; but I should like to make my position clear with respect to the tobacco-growing industry. If I thought for a moment that the revenue would be affected by the proposals suggested by the growers, I would not support them. On the admission of the Minister (Mr. Gullett), he will be compelled, whether he likes it or not, to vary the excise duties during the next three years, and in the third year will be compelled to raise the whole of his revenue from this source in the form of excise. He said definitely that after three years the whole of Australia’s requirements of tobacco would be produced in Australia. Each year the excise duties will have to be amended. I believe in a reduction of the duty from 5s. 2d. to 3s. a lb., but I contend that the growers are entitled to a variation or differentiation in the rate, to enable them to get their tobacco on the market. I am sure that it will take some time for the Australian consumers to acquire a taste for Australian tobacco; but I believe that taste is rapidly being acquired. When one enters certain retail tobacco stores and asks for a particular brand of Australian tobacco, one is sometimes told that the supplies have been sold out. I feel sure that this industry will become very valuable to Australia. If some honorable members went into a tobacconist’s shop in the Old Country and purchased the best tobacco that could be obtained in Great Britain they could not smoke it, even if it were proved that it was better tobacco than they had been smoking in Australia, because they would not have acquired the taste for it. .When I was in London I could not obtain a tobacco that suited my taste and almost gave up smoking on that account. Complaints are made, not because the quality of Australian tobacco is inferior, but because Australian consumers have not acquired the taste for Australian tobacco. I am certain that the Government must get £6,500,000 from smokers, but if, as the Minister stated, we shall be meeting our own requirements within three years, we shall not get that amount without a variation from year to year in the rate of excise. I see no difficulty in the way of the Government doing that, and I regret that it is regarding this item solely from a revenue view-point. Every one agrees that £6,500,000 must be raised; but the Minister cannot tell us the amount of excise which must be imposed on Australian tobacco next year. He cannot do so because he does not know the quantity to be produced. He has said that the quantity will increase from year to year, and that although 2,000,000 lb. was produced last year, and 8,000,000 lb. may be produced this year, it is quite conceivable that next year 15,000,000 lb. may be produced.

I listened with a great deal of interest to the informative lecture on tobaccogrowing delivered by Dr. Dickson in this building yesterday, and I am sorry that the Minister for Trade and Customs was not present.

Mr Gullett:

– That was due to the pressure of departmental business.

Mr GIBSON:

– I realize that. Had the Minister been there, he might have modified some of his statements he made this morning.

Mr Gullett:

– I have discussed the matter very fully with Dr. Dickson.

Mr GIBSON:

– Quite so. Dr. Dickson said that there are thousands of acres in Northern Queensland suitable for tobacco-growing, and that in Tasmania tobacco almost as good as that produced in Northern Queensland is being grown. Between these two points there are, he said, many areas consisting of thousands of acres suitable for the production of tobacco. I know from my own knowledge of thousands of acres of good tobacco land, with a 27-inch rainfall, worth probably £4 an acre carrying about one sheep to the acre. That land conforms almost entirely to that described by Dr. Dickson. At present farmers are looking for every possible means of increasing profitable production. Scores of farmers have been cultivating a few acres of tobacco. They are doing it in my district. If the tobacco they grow does not turn out to be a good leaf, it is their own fault. I do not agree with the Minister when he says that production is going ahead too fast, but I agree with him when he says that he has no time for a man who produces an inferior article. The man who does not cure his leaf well is like the farmer who produces a crop of hay which is not fit to sell, and has to be fed to his pigs. The manufacturers can be expected to buy only good leaf. I was pleased to hear the Minister say that the quality of our tobacco has so improved that at least 35 per cent, of it may be regarded as first class. If this great development has come about within the last two years, what will happen within the next two years?

Mr Gullett:

– Australian tobacco will have to carry a higher excise.

Mr GIBSON:

– According to the Minister it will have to carry the whole of the excise within three years. I believe that we shall be able to export tobacco. Already we are exporting tobacco worth £420,000.

Mr Gullett:

– That figure relates to re-exports.

Mr GIBSON:

– It is impossible to gather from the Tear-Book what these re-exports are. They appear under the heading of “ Exports of Australian products.” I thought that it might be inferior tobacco exported to the islands for niggers to smoke.

I hope that as a result of the Ottawa Conference we shall be able to export tobacco to Great Britain. We have only to look at the great expansion of rice growing in Australia. Five years ago the production of rice in Australia was confined to 153 acres. People ridiculed the idea that this country could grow a product which was only fit to be grown in India and other tropical countries.

Mr Archdale Parkhill:

– Where it ought to be grown. Does the honorable member regard rice growing as a satisfactory Australian industry?

Mr GIBSON:

– The figures prove that it is. After five years, we have 20,000 acres devoted to rice production, not only supplying the needs of Australia, but also enabling rice to be exported to New Zealand and other countries.

Mr ARCHDALE Parkhill:

– And what is the quality of it?

Mr GIBSON:

– It is said to be actually better than rice grown in India.

Mr Nelson:

– The Japanese stipulate that they must have Australian-grown rice in preference to ‘ the rice of other countries.

Mr GIBSON:

– I can understand that. I am merely citing the wonderful strides rice-growers have made within the last five years to show what may be done with tobacco-growing.

Mr Fenton:

– It is a great tribute to the implements produced by Australian factories.

Mr GIBSON:

– Australian implements are good. I regret that the Government has not accepted the suggestion of the growers, particularly as, according to the Minister’s own admission, it will be obliged to do so within the next three years.

Mr NELSON:
Territory · Northern

– Duties are imposed for two purposes, to protect a local industry, and to raise revenue. The tobacco duty comes under either category. Not only is Australia eminently suited to the growth of tobacco, but tobacco can be economically grown here. Furthermore, we have in Australia itself a large market for our production of tobacco. It is true that under existing circumstances the great tobacco trusts of the world are seeing to it that Australians do not acquire a taste for Australian-grown leaf, just as some distillers may turn out an unpalatable whisky to mislead the people as to the quality of the Australian output. If given an opportunity to mature, there is no reason why Australian tobacco leaf should not be as good as any produced in America. Last week Dr. Gilruth, who was formerly Administrator of the Northern Territory, informed me that, during his term of administration, leaf which was grown on an experimental plot in the territory brought 4s. 6d per lb. in London, and was classified as being among the best of cigar wrappers the purchasers had ever used. The Northern Territory is, therefore, eminently adapted to the production of tobacco. I quote the following from the Bulletin of the Northern Territory for 1913, an official publication : -

Tobacco production, if the industry be taken in hand, will, I feel certain, prove of great importance to the Northern Territory, and become a staple industry. Two or even more crops can be produced annually.

That was the result of our magnificent climate. According to Dr. Dickson, a certain amount of humidity is essential for the production of a good quality tobacco. There are all conditions of climate, from dry to humid, in the Northern Territory, and the most important consideration of all is the fact that all the land there belongs to the Crown. There is, therefore, no need to pay fabulous prices for land. Another main factor is its accessibility to the world’s markets. From the Bulletin of the Northern Territory I also quote the following : -

Two men are experimenting with throe kinds of tobacco, and received ls. 3d., ls. (id., and ls. 5d. per lb. respectively for a parcel of unsweated leaf that they sent .to the States Tobacco Limited.

The report goes on to show that these men grew other crops, which were most prolific. In another portion - of this bulletin I find the following: -

In the year 1800 a tobacco plantation was initiated within this area (at Batchelor) by Mr. Brandt with every prospect of success. Mr. Brandt secured the services of Mr. Sutherland, a tobacco expert from India; a large sum of money was expended; about 70 acres were cleared and stumped; an extensive tobacco-curing shed and various other necessary buildings were erected. A few tons of tobacco were cured, and a sample forwarded to the tobacco market in Dresden is said to have realized 10s. 9d. per lb.

Mr. Brandt, who belonged to a wealthy family, inherited a fortune, and left the territory 42 years ago, and nothing further was done in the matter of tobacco cultivation.

As the honorable member for Corangamite (Mr. Gibson) has said, tobaccogrowing is an industry that is capable of expansion. Australia must look to its exports to secure national stability. There is nothing to prevent us from competing with the world in the matter of tobacco production;, but, like all other industries, tobacco-growing must have a certain amount of protection in its early stages of development. According to the report of the Select Committee on Tobacco-growing, some years ago the price of American tobacco was about 8£d. per lb. To-day it is 6½d. per lb. or perhaps less, because America has had a record production this year. A reduction of our duties would only serve to benefit the big tobacco trusts of the world. On the other hand, increased excise duties would result in higher prices for Australian tobacco. It is wonderful that the Australian public does not see through the methods adopted by the tobacco trusts. In Queensland, where tobacco leaf was being grown very successfully, a company was started to manufacture it into tobacco for smoking. The company took the leaf right from the kiln and put it into containers for sale to the public. It was only natural, under such circumstances, that the public should prefer the> American tobacco. Experts say that in. Great Britain the period of maturityafter curing should be about two and a half years, and in America about two years and four months. It stands toreason that, if we take tobacco right from, the kiln and tin it for sale, the resultsmust be derogatory to the Australian, product.

In coming to a decision on this, subject, we must take into consideration the probable number of people likely to be employed as the result of an expansion, and the possibility of capturing overseas markets. I disagree with, the members of the Country party who say that certain industries in Australia are economically unsound, and are really operating on a false basis. For example, they cite the sugar industry. We have to look further ahead than the present. We cannot build up a nation unless we grow and produce all the things that that nation requires, together with a surplus for export. Had the members of the Country party really been anxious to assist the tobacco-growers of Australia, there is not the slightest shadow of doubt that this Parliament would have long ago amended the tariff schedule. But, when an opportunity was presented for a majority to give a vote in favour of the Australian tobaccogrowing industry, the members of the Country party avoided the issue.

Mr Abbott:

– The decision would have gone against us by six votes.

Mr NELSON:

– It will now go against honorable members by twelve votes.

The CHAIRMAN (Mr Bell:

– The honorable member must not comment upon any vote taken in this chamber.

Mr NELSON:

– I was merely attempting to show the futility of this debate. The fight that is being put up by the corner party is only so much camouflage.

The CHAIRMAN:

– Those remarks are not in order, either.

Mr NELSON:

– I have produced evidence of the tobacco production in the Northern Territory up to within the last fourteen years, and have shown that’ as high a price as 10s. per lb. has been received. Only last week I was informed by the late Administrator, Dr. Gilruth, that from 4s. Gd. up to 6s. per lb. had been paid within comparatively recent years, lt is futile to attempt to grow tobacco if the value of the land is inflated to an enormous extent. A lot of labour and attention are necessary if any sort of a living is to be made. Only by the utilization of lands that are acquired at a low cost can the industry be firmly established in Australia. If the Government in its wisdom will afford the industry an opportunity of developing in the north, I am satisfied that the results will be astounding. Rightly or wrongly, tobacco-growing has been placed within the category of luxury industries, but it has become a necessary luxury, and one that the people will demand no matter what the circumstances may be. Why, then, should we not cater for our homegrown product, instead of giving preference to the product of the cheap, sweated labour of other countries? The opportunity is present. All that is needed 3 initative on the part of the Government.

I marvel at the nature of some of the statements’ that are made by members of the Country party, regarding the possibilities of Australian production. I frequently wonder what would have been thought of such statements by the late Sir John Forrest, and other men of wide outlook, who legislated not only for the present, but also for the future. Some persons who happen to be engaged in wheat production can see no good in any other industry. I disagree with the contention of the Minister, that only a few small industries have been slaughtered. Every industry must commence in a small way. It is only by sympathetic encouragement that an industry can grow from the struggling stage to maturity. It is a reflection on the intelligence of the people to say that a few industries were slaughtered because they were of no importance. Every industry is of importance to Australia. We shall not approach to those ideals of nationalism to which we aspire, until we make this country self-sustaining and self-maintaining. Had I a vote it certainly would be cast against the Government, for having robbed this industry in its infancy of what is essential to its life. If the committee observes slavishly the dictates of a board that is unsympathetically disposed towards primary producers, the onus for whatever results will be on its members. We who sit on this side will always uphold the interests of primary producers, and afford them every opportunity to make progress in the industry in which they are engaged.

Sir LITTLETON GROOM:
Darling Downs

– The previous debate concerning the tobacco-growing industry in Australia, on the motion to print the report _pf the Tariff Board, afforded an opportunity to honorable members to express as early as possible their views upon this industry, and to make representations to the Minister with respect to it. That opportunity was availed of, and, according to the right honorable the Leader of the Country party (Dr. Earle Page), a definite and distinct promise was made that the Government would give full consideration to the proposals that were then submitted. Presumably, the Minister, in pursuance of that promise, has given consideration to the different points of view expressed, and to the representations that were made, but it is rather disappointing to find that those representations have had such little effect upon the honorable gentleman. A case could not be better presented than that which was placed before him by the deputation that waited upon him prior to the last debate in this chamber. The deputation waa well organized, and the case properly prepared and logically put. It was thoroughly representative of the whole of Australia, because every interested State in the Commonwealth was concerned in it. It now becomes our duty to consider the proposals of the Government, because the alternatives that have been put forward have been, definitely turned down by it.

It is, I think, a pity that items of the tariff should be considered on other than non-party linos, except when some great national policy is involved. Otherwise, a tremendous strain is placed upon honorable members, who may have to choose between loyalty to the party and loyalty to their district. It is not fair that any honorable member should be placed in that position. If he feels that a large number of his constituents hold views that harmonize with his own, he ought to be able to express them in this chamber, and to vote as he thinks fit. The Toowoomba Chronicle, of the 8th December last, published the following telegram from Melbourne of a statement that, it was reported, had been made by the present Prime Minister (Mr. Lyons) : -

Mr. Wheeler is reported to have said that the Opposition in the Federal Parliament has no policy on the question of tobacco production in Australia. This is a misrepresentation of a communication sent to Mr. Wheeler, n ad 1 think it is important that the matter

Sir Littleton Groom

Should be put right. What I said was that the question of tobacco production had not been considered on party lines. The encouragement of tobacco-growing is highly desirable, and my point was that the matter should be considered on non-party lines.

The point made by the right honorable gentleman was that this matter could be considered on non-party lines. One can well imagine any member of the party, upon reading that statement, considering himself free to make promises to tobacco-growing organizations.

Sir LITTLETON GROOM:

– I shall deal with that presently. Even in relation to the question of revenue, I consider that the Minister is introducing a dangerous .principle. Unless some great national policy is involved, there ought to be freedom of action. The following paragraph appeared in a Queensland newspaper on the 17th December last: -

In view of Labour’s misstatements regarding the tobacco industry, Senator Foll, who was chairman of the Senate Tariff Committee that dealt with the industry, to-day explained the attitude: of the National-Country party. He said: “I was chairman of the Senate Tariff Committee that dealt with the Australian tobacco industry. There were five senators on this committee. We unanimously agreed to support the present duties, and submitted such a proposal to a full meeting of Nationalist and Country party senators. They, in turn, after hearing our views, by ai» overwhelming majority agreed to support the present tobacco duties.”

The point that I wish to make is that at that date, at all events, there was a Tory strong opinion in the Nation alCountry party organization, in favour of the then existing duties. A new Parliament met in February, and before long the present tariff proposals were suddenly sprung upon us. I repeat what I said on a previous occasion : that if the Minister had reason to alter the duties, he, at any rate, chose a most inopportune time ; that his action caused consternation throughout the tobacco-growing districts, and affected, financially, the men who were engaged in the industry. It was a very grave mistake, because this action could well have been deferred.

During the last recess, I availed myself of the opportunity to meet the growers. It can be said of these men that they place their case clearly before one. They say definitely that, disregarding party politics altogether, an appeal was made throughout Australia for the establishment of new industries, to obviate the necessity for importing; and that Parliament deliberately enacted special duties, which induced Australians to engage in this particular industry. It is within my knowledge that men who were looking for avenues of employment went from Brisbane and elsewhere to Mareeba. They had not previously engaged in agricultural work. They relied upon legislation by this Parliament, and believed that this industry would be placed on a sufficiently stable footing to enable them to embark on a life’s work. This was not to be a temporary undertaking, or anything in the nature of relief work. This Parliament deliberately invited men to engage in it as a life undertaking ; to put into it all the capital that they possessed, or possibly to borrow if they had no capital.

Silting suspended from 12.45 to 2.15 p.m.

Sir LITTLETON GROOM:

-Figures already quoted in this debate indicate that in several States there has been a considerable extension of land settlement, due almost entirely to the development of the tobacco industry. Those associated with it realize the absolute necessity to produce leaf of the highest possible quality. Dr. Dickson, whose opinion has already been referred to by other honorable members, in a statement yesterday declared that Australia is to-day producing leaf of high quality, capable of holding its own anywhere. Earlier in my remarks, one honorable member, by way of interjection, asked if we who are supporting the protests against the Government’s proposals expect the tobacco duties to be permanent. I make no such suggestion, because Parliament is a sovereign body with complete power to alter its tariff legislation as it thinks fit. But the possession of these sovereign powers does not absolve Parliament from its obligation to deal fairly by those who have engaged in this industry on the strength of tariff protection given to them by the Scullin Administration. Any drastic alteration either by administrative or legislative action must necessarily mean dislocation of the industry. and, as we have noted, the sudden change made by this Government has caused a great deal of consternation among growers in the various States.

The Minister, in support of his proposals for reduced duties, attacked the Scullin Government tariff on the ground that it would lead to a serious loss of revenue. It is, I think, obvious that if these duties that are now introduced prove effective, and if the local industry eventually supplies the whole of the home market, further legislative action must be contemplated. I believe the preceding Government had in mind this possibility, because obviously any loss of revenue through the development of an Australian industry must be made good by some means. Two proposals are before the committee - one submitted by the Minister, and one put forward by the Country party. The Minister argues that the Government’s proposals must be adopted in order to safeguard the revenue from the serious losses threatened through the operation of the previous high rates of duty. He has also frankly admitted that if the duty is effective it will be necessary to introduce legislation to alter the excise duties. I approve of the alternative proposal, because I believe that under it the growers will receive more adequate protection, and, therefore, will be encouraged to expand the industry. When I was at Warwick, in Queensland, recently, I met representatives of the local Chamber of Commerce, as well as growers, who urged the adoption of the alternative scheme propounded by the deputation to the Minister.

The Minister urges, further, that the higher duties imposed by the Scullin Government will lead to inefficiency. Those who heard Dr. Dickson yesterday do not share that view. Dr. Dickson stated definitely that growers in all States are aiming at a higher standard of production, and we have been informed that they are taking advantage of all the assistance that is available to them. In Queensland this assistance is given by experts of the Agricultural Department, and I am glad to say that growers there are giving close attention to the seed used, with a view to producing a leaf of a uniformly high quality.

High protection does not necessarily mean inefficiency. No one will suggest that the dried fruits industry, which enjoys an almost prohibitive tariff, is not conducted on the most modern lines and is not organized most efficiently. The same may be said of the sugar industry in Queensland. Internal competition inside the tariff wall, as well as self-interest, makes for efficiency. Another objection advanced against the higher tariff is that it will lead to a boom in values, with possibly disastrous results to industry. That charge cannot be sustained in Queensland, where prices for suitable land are not excessive. As regards the industry itself, it can be said for it that it is a useful one, but no one will claim that it is a “ millionaire “ industry. Those connected with it require to give it their whole attention and also to bring to bear a considerable amount of skill. It is essentially a full-time job for the small farmer.

I am sure that the Minister is just as “anxious as we all are to do the right thing by the tobacco-growers. I therefore hope that further consideration - there is time for it - may induce him to accept the amendment moved by the honorable member for New England (Mr. Thompson). It is unfortunate that he did not obtain the views of growers before making an agreement with the manufacturers as to the average price to be paid for this season’s production. It is possible that, as time goes on, a greater proportion of bright, high quality leaf will be produced in Queensland than in the other States, because the soil and climatic conditions there are probably more favorable than in the southern tobacco-growing areas. But at the moment I am not concerned with that aspect of the subject, but desire the industry to be considered on national lines. My chief concern is to see that the whole position is reviewed by the Minister in the hope that the Government will accept the Country party’s proposal which, I feel sure, is in the best interests of the industry and the people generally.

Dr EARLE PAGE:
Cowper

.- About two months ago the debate on the tobacco duties was adjourned to enable the Government to reconsider its attitude towards the tariff and excise on tobacco. To ensure the adjournment of the debate

I and other members of the Country party voted with the Government on the distinct, undertaking, given by the Minister for Trade and Customs - that promise has been referred to in this debate by the Minister for Commerce (Mr. Hawker) and the Prime Minister (Mr. Lyons) - that the request then made would receive the most sympathetic consideration.

Mr Gullett:

– So it did.

Dr EARLE PAGE:

– To-day we have been taunted because we voted with the Government on that occasion, and it has been suggested that we ran away from our position. Those who understand parliamentary procedure know that Government supporters, being in the majority, would not allow the Minister to lose control of the business of the House. We were assured that our request would receive careful consideration. In fact the Minister for Trade and Customs informed me shortly afterwards, that he had given instructions to certain officers to ascertain the exact figures with regard to this season’s crop. If we are to judge from the schedule of tobacco duties now before us, our request has not received further consideration.

Mr Gullett:

– There is nothing in the alternative proposal.

Dr EARLE PAGE:

– So weak is the Government’s case that, instead of allowing the customs and excise duties on tobacco to be discussed in this chamber and decided on their merits, by open vote, the Government has intimated that it will regard the issue as vital and, if defeated, it will resign. In this way members are prevented from exercising their unfettered judgment on this important issue.

The weakness of the Government’s case was further evidenced in the tactics of the Minister for Trade and Customs this morning. There is a legal term, argumentum ad hominem, which is used when a person who has no case abuses the other side. The honorable gentleman went back several years and inquired what I did when a member of the Bruce-Page Government. Almost immediately he destroyed his own argument by saying that the first request that I made to him as Minister for Trade and Customs was for an extra protection of 8d. per lb. on tobacco. I went into the Bruce-Page Government with the definite object of trying to stabilize the political situation at that time, and to that end, I was willing to allow the tariff question to remain in abeyance. While a member of the Cabinet, I tried hard to have a definite fiscal policy laid down. When I found that the temper of the country was such that there was little hope of relief for the primary producers, I urged them to get into the vicious circle themselves, and obtain all the protection they could, because only by such means would they be able to get any measure of justice. That is exactly what is being done at the present time by the Government in connexion with the exchange position. Keeping the rate of exchange high is practically .buttressing artificially the exporters of primary produce; it is a means of compensating them for the disabilities which they suffer, under the tariff.

While a member of the BrucePage Government I was at all times loyal to it. At no time have I said anything derogatory to any of its members; nor will I do so now, whatever gibes and sneers are thrown at me. Such conduct 1 regard as a matter of decency and good taste. The Bruce-Page Government granted the primary producers certain concessions by means of taxation reductions, the establishment of a rural credits branch of the Commonwealth Bank, export control boards, and so on. In addition, it entered into the financial agreement with the States, established the Loan Council, and altered the personnel of the Commonwealth Bank Board - an act which is responsible for Australia to-day being on an even keel.

I have no regrets for the attitude I adopted while a member of the BrucePage Government. At that time, the tariff was not an issue that could have been fought successfully. But to-day the position is different, because on every hand the people are calling for a change in our fiscal policy. We should, therefore, lay down certain definite principles, and ‘follow them. One of those principles must be that a growing industry which is increasing its efficiency and improving the quality of its output to such an extent that it bids fair to become an export industry, should be given a chance to carry on, especially when it can show that any protection granted to it will not mean an increase in prices. Catalogues issued by various tobacconists show that Australian tobacco is selling at an average of 4s. per lb. less, or 3d. per oz., less than the imported tobacco.

That the Government realizes that it has a weak case is evident from its decision to mak« this a vital issue. It fears that honorable members, if unfettered, will vote in favour of the proposal of the honorable member for New England (Mr. Thompson). The decision of the Government is all the more difficult to understand when we remember the statement made by the Prime Minister in his policy speech that in tariff matters every member of the United Australia party would be free to vote as he thought fit. The honorable member for Darling Downs (Sir Littleton Groom) has reminded us of the undertaking given by the Prime Minister on the 12th December that, in so far as tobacco duties were concerned, there would be no attempt to fetter honorable members. Even if the Government is not prepared to meet the Country party and the Opposition in this matter, it should at least give honorable members a chance to vote according to their conscience. And if the vote goes against the Government, it should take that reverse in a proper spirit, and accept the decision of the House as on any other tariff item. The Government displays a singular lack of perspective when it makes this a vital issue. After all, what is the difference between the’ two proposals? It is not a question of revenue, because whether the proposal of the honorable member for New England, who represents the tobacco-growers, or that of the Government, is accepted, the revenue will be approximately the same. lt is” desired to obtain an additional £700,000 per annum from the tobacco industry. That amount must come from somewhere. There is no question about the methods to be adopted to obtain it. The money will be obtained under both proposals by means of customs and excise duties. So far the two plans are practically the same. Nor is it a question of deciding which industry shall find the money, for both plans agree that it shall come from the tobacco industry.

I cannot accept the statement of the Minister that unless the Government’s proposal is accepted, it will be necessary to cut down pensions or increase income and other taxation. Under both plans the amount being raised is definitely stated to be £700,000; the money is to come out of the same industry. The only point of difference is whether the £700,000 is to come entirely from the local industry, or partly from the local industry and partly’ from imported tobacco. Under the Government’s proposal those who will pay will be the poorer classes of the community who smoke the cheaper brands of Australian tobacco, while those who will escape will be the men who smoke the more expensive imported leaf, in respect of which there will be no alteration of duties. Surely it is only fair that both classes of consumer should be called upon to pay. When we narrow down the issues, and see the effect of the two proposals - that one makes both the rich and the poor smoker pay, and that the other, that of the Government, makes the Australian smoker and the Australian tobaccofarmer carry the whole burden - it is indeed surprising that the Government refuses to allow honorable members to vote, freely on this matter. My surprise is greater when I look at the other tariff proposal of the Government. In one other important industry, the protection is to be reduced by 40 per cent., but that is the only industry in which such a reduction is contemplated, although in some instances, a reduction of 20 per cent., is contemplated in certain industries. On the other hand, there are eleven increases of duty affecting industries which are not anything like as important to Australia as is the tobacco industry. For instance, a duty 7s. 6d. is placed on electric smoothing irons. Since the wholesale price of one of these irons in the country of manufacture is about 2s. 6d., the duty is practically 300 per cent. There can be no comparison between the industry which manufactures smoothing irons and the tobacco industry as regards the number of persons employed and their value to Australia. Another case is that of clothes wringers, the duty on which is increased by 25 per cent. What was the reason for the haste in imposing this high duty ? I have read the Tariff Board’s report in this connexion, and I propose to quote an extract or two from it.

Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES · NAT; UAP from 1931

– What have clothes wringers to do with tobacco?

Dr EARLE PAGE:

– I mention clothes wringers by way of comparison. Under the Government’s proposal, the price for an Australian-made wringer will be increased by over £1, whereas under the Country party’s proposal Australian tobacco will- be cheaper in Australia than before. The extract from the Tariff Board’s report, to which I have referred, reads -

The managing director of the manufacturing company visited Australia last year, and went into the question of manufacturing in Australia. The proposal was considered uneconomic, as, in order to produce the “ Model 50 “ at a reasonable price it would be necessary to instal a plant costing £50,000 with a capacity of 1,000 machines per day. The whole of Australia’s requirements could be manufactured in a few days.

The CHAIRMAN:

– The honorable member is not in order in quoting from that report in connexion with the item now before the committee.

Dr EARLE PAGE:

– I mentioned wringers only by way of comparison. The Acme wringer is produced under certain patent rights, and it is alleged that the Australian machine infringes those rights. The point is that the number of machines proposed to be made by the Australian company falls far short of the number which is regarded as economically sound.

Mr Gullett:

– What is the ad valorem duty ?

Dr EARLE PAGE:

– The old duties were 12 per cent. British, 20 per cent, intermediate, and 25 per cent, general, whereas the new duties are 40 per cent., 45 per cent., and 50 per cent, respectively.

Mr Gullett:

– That is not an increase of 300 per cent. !

Dr EARLE PAGE:

– If we accept the statement of the manufacturer whom 1 have mentioned, we must admit that the industry for the manufacture of clothes wringers is being established on an uneconomic footing. Yet the Govern- , ment’ increases the duty on wringers to such an extent that the price of a machine to consumers will be higher, and the industry will never be an economic one. Last year when it was suggested that increased duties should be accepted without question when recommended by the Tariff Board, the Minister for the Interior (Mr. Parkhill) and the Minister for Trade and Customs (Mr. Gullett), then, sitting in Opposition, almost went purple in the face; they said that they would not favour any duty which tended to create a monopoly. How different their attitude to-day!

Mr Archdale Parkhill:

– The right honorable member did the same himself in connexion with the Pratten tariff.

Dr EARLE PAGE:

– That is not so. Fifty per cent, of the recommendations of the Tariff Board were not carried into effect. At this time it is most unfortunate that the Government should do anything to throw men out of work. As the honorable member for New England (Mr. Thompson) pointed out, many of the workers whose employment in the tobacco industry is now threatened, were literally taken from under the railway bridges, and put to reproductive work on the farms during the last twelve months. It would be nothing short of tragic to interfere with the development of this industry now, and to throw these workers back on the dole. Our first object during this time of depression should be to get as many of the unemployed back to work as possible. If the question arises of preference to a primary industry which employs thousands of workers, or to a secondary industry which employs merely scores, it seems reasonable that first consideration should be given to the primary industry. During the last three years unemployment has been proportionately less in primary industries than in secondary industries. Despite the depression, our primary industries have been steadily expanding. Our exports of butter have increased by 60,000,000 lb., compared with last year; of wool by 3,000,000 lb.; of mutton and lamb by 25,000,000 lb.; and of wheat by 35,000,000 bushels. The tobacco industry, which has always been the Cinderella industry of this country, increased its production from 900,000 lb. in 1929, to 10,000,000 lb. last year. Surely such an industry is deserv ing of encouragement. At this time the policy of the Government should be to raise, not to reduce, the duty.

The Minister said just now that he anticipated that, within three years, sufficient tobacco would be grown in Australia to enable us to prepare for export. At any rate, that was the hope he expressed. The other day, however, he seemed to be almost terrified because the industry showed signs of growing too quickly. The suggestion was made by myself during the healing of a deputation of growers by the Minister for Trade and Customs (Mr. Gullett) that if Australian production was greater than was anticipated, there should be an increase in the Australian excise rate, pari passu, so that the national revenue would not suffer. This suggestion was made on the 18th March, so that the Minister has been familiar with it for some time. The Minister stated that this was an extraordinary industry, because, if the protection asked for were granted, something like £150 would be lost in customs revenue on every acre under cultivation. Surely, however, it is desirable that we should do what we can to provide employment for our people. Even at the present rates a crop of 600 lb. to the acre returns to the Treasury £90 in excise. It is better to obtain our revenue in that way, while at the same time providing occupation for our people and cheapening an article to the consumer than merely to collect revenue through the customs by imposing high duties on, and thus making dearer, a commodity which is almost as much a necessary to most of our men, and many of our women, as is food itself. If the argument is sound that we ought not to encourage an industry in this country if we will thereby lose customs revenue, why should it not be applied to the butter industry, and other important primary industries? If the Government’s policy in regard to tobacco is persisted in, 5,000 men engaged in the industry will be thrown back on the dole, and it will cost the taxpayers £250,000 for their support during the next winter and spring.

I have never hesitated to demand protection for any industry which, in my opinion, deserved it. I have laid down certain tests, which seem to me te be scientific enough, and which I now observe have been adopted in England, to determine what industries are entitled to protection. The tests are: Does the industry increase its efficiency when granted encouragement? Does it expand under protection so that it can supply all home requirements? Is there a reduction in price? And is the industry getting ready for export? The last point is important, because in this country we must increase our exports before we can restore prosperity. For many years, as the Minister truly said, we kept the duty on tobacco at between 2s. and 3s. per lb. With those duties, tobacco production in this country rose during the war to nearly 3,000,000 lb., but that .was because war conditions provided a large measure of protection for the local industry. After the war, production declined to 900,000 lb. This industry has had several spasmodic bursts of activity. Time after time it has begun to make headway, but always it has fallen back again, and that occurred when world prices were higher than they are to-day. At the present time, the price of American tobacco is so low that it is practically being dumped on the Australian market, and any protection which we afford our own tobacco may well be regarded as an anti-dumping measure. The growers ask that during the next two years they should be allowed a breathing space in which to develop and consolidate their industry. They ask that the margin between the excise on Australian and imported tobacco should be slowly reduced, so that when the Australian industry is able to supply all our requirements, and the public palate has become used to its product, it will be able to supplant foreign tobacco, and, at the same time, provide its full share of the revenue. I am more concerned with what takes place behind a tariff wall than with the height of the wall itself. Last week Parliament voted £3,000,000 for the relief of unemployment. Surely it is unwise to vote money for the relief of unemployment one week, and the next to take action which will increase the number of unemployed.

It was stated by the Minister for Trade and Customs (Mr.

Gullett) that, to raise the excise and customs duty on imported tobacco to 8s. 4d. per lb., would result in a diminution of smoking in Australia, and a corresponding fall in the revenue. In Great Britain the customs duty on tobacco at the present time is 9s. 6d. per lb., which is ls. 2d. higher than the Australian impost. Moreover, the Minister said just now that only 3,000,000 lb. of Australian leaf would go into consumption next year, the rest being held back to mature. If that is so, what harm can be done by reducing the excise duty on Australian tobacco during this year? We might at least do as much as that towards reducing the price of tobacco to the public. In these days of distress and depression, there is enough gloom about without making it more difficult for people to get tobacco. I trust that the Government will allow an open vote to bc taken on this item, so that we may know where” honorable members stand.

Mr BRUCE:
Assistant Treasurer · FLINDERS, VICTORIA · NAT; UAP from 1931

– This matter is of the greatest importance, both to the Australian tobacco-growing industry, and also to the revenue. We must consider whether any action we may take is likely to cause a serious falling-off in the national revenue, and it is particularly from that angle that I propose to discuss the subject. The right honorable member for Cowper (Dr. Earle Page) seemed to be somewhat ^sensitive in regard to what the “Minister for Trade and Customs (Mr. Gullett) has said about him, and his attitude to the tobacco industry while he was a member of the Government .which I led. I think that it was quite proper for the Minister to remind the right honorable member that, although he now seems to regard it as imperative that there should be a duty of 5s. 2d. per lb. on imported tobacco, during the six years he was associated with me in a previous government, he gave no evidence of believing that anything like so high a duty was needed. The right honorable member seemed to suggest that the Minister for Trade and Customs had been guilty of some sort of impropriety in mentioning the matter at all. The facts are well known to every member of the community, and have nothing to do with the internal affairs of the Cabinet, or with the relations between one Minister and another. At the time of which I speak, the right honorable member evidently did not believe that so high a duty was necessary, and had he continued to be a member of the Government, he would have been surprised, I think, if it had been proposed to increase the duty on tobacco to the height now suggested. In the circumstances, I have no doubt that he would have applied those admirable principles he enunciated just now, and would have come to the conclusion that such a large measure of protection would inevitably lead to inefficiency in the industry.

It is now well known to every honorable member in this chamber that tobacco contributes to the revenues of the Commonwealth about £6,500,000 a year. It might be thought that this is a very heavy toll to take from the users of tobacco, but if we compare ourselves with other countries it will be seen that tobacco taxation here is not unusually high. The sum of £6,500,000 represents approximately £1 per head of our population. In Great Britain the taxation raised from tobacco is approximately £62,000,000, or about 27s. 2d. per head of population. Tobacco duties are a perfectly legitimate source from which to draw our revenue, and it is clear that it is one which we must continue to use. We cannot afford to give up revenue from tobacco, because, if we did, it would bo difficult to get it in other ways. How important is this sum of £6,500,000 will be realized if we consider some of the other great sources of revenue. Income taxation is bringing in at the moment a little under £9,000,000; the estimate was £9,820,000. That is only about £2,750,000 more than tobacco is contributing to the revenue, and yet income taxation is levied upon 260,000 people, and the exemption, because of our financial necessity, is low. It is unthinkable that we could transfer any part of the burden that tobacco is carrying to the shoulders of the income taxpayers. It is equally impossible that other sources of taxation which presses so heavily on the. community, such as land tax, should bo further drawn upon.

We were, then, faced with the position that this source of revenue, owing to diminished consumption, was beginning to fail us. The consumption of tobacco has diminished from about 23,000,000 lb. to 18,000,000 lb. ; but the position has been met more or less by the steady increase of the tobacco duties - from 2s. to 2s. 8d., then to 3s. 6d., and finally the tremendous increase to 5s. 2d made by the late Government

Mr THOMPSON:

– The duty is 9s. 6d. in Great Britain.

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– I shall show later that the suggestion embodied in the amendment of the honorable member would render the levying of a toll of anything like 9s. 6d., an utterly impossible task in Australia. We have to address ourselves to the problem of how to protect the revenue, and in considering that we must recognize that there is a swing over in consumption from imported tobacco to Australian tobacco. Therefore, our revenues in the future will have to be raised upon Australian tobacco. We all sincerely hope that the development of this industry will enable it gradually to supply the whole of our requirements but while it is meeting those requirements we shall be faced with the problem of how to raise the revenue we need. We are, indeed, immediately faced with that problem, because of the amazing expansion in production in Australia. Last year the production was less than 2,000,000 lb., and this year it will be 10,000,000 lb.

Mr Stacey:

– And next year it will be 15,000,000 lb.

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– We have to recognize that possibility. The position was that we had an impost upon imported tobacco of 7s. 6d., but the excise upon Australian tobacco was only 2s. 4d. It is obvious that we could not, if the Australian production of tobacco increased from 2,000,000 lb. to 10,000,000 lb., and the excise were only 2s. 4d., get the revenue we need, because the use of the local tobacco would diminish the use of the imported tobacco upon which the duty is 7s. 6d. That that might happen was clearly seen by the late Government, because it referred this question to the Tariff Board, and also to a committee of departmental officials, consisting of Mr. Hall, Mr. Sheehan, and Professor

Giblin. The reference to the committee was the consideration of the question from the aspect of revenue protection. * Even the reference to the Tariff Board made it clear that the effect upon revenue was to be borne in mind in any recommendation that might be made. Everybody recognizes the necessity for protecting the revenue in this matter. The Tariff Board investigated the whole subject, and recommended that the duty of 5s. 2d. should be reduced to 3s., and that the excise should be increased from 2s. 4d. to 4s. 6d., the excise operating on both Australian and imported tobacco. The alteration suggested by the Tariff Board involves a loss of revenue of about £150,000 for every additional 1,000,000 lb. weight of tobacco leaf produced in Australia in excess of 6,000,000 lb. We have also to consider the effect of this alteration upon the industry. I have not yet heard any real defence of this extraordinarily high protection .that is asked on behalf of the local tobaccogrowers. It has been stated time and again that the duty should remain at 7s. 6d., but we have had no real explanation of why the industry is so different from any other that we can cease to think of rates of 10 per cent., 20 per cent., and 60 per cent., and can talk of percentages running into hundreds. I have heard no explanation of this change of front by the members opposing us, and it is almost incredible that any one can seek to justify such rates, even ignoring the revenue position altogether. I do not think that it can properly be suggested that the industry should be protected to the extent required by those who are attacking the Government for its present action. The actual position is that American tobacco can bo landed here for ls. per lb. including exchange and all other costs. To that must be added the duty. The Tariff Board, in dealing with the question, has gone into all the details of production costs, and yields per acre, and considers that, in fair average country, under proper conditions, an average crop of SOO lb. per acre can be obtained at a cost of £35, which works out at a cost to the Australian producer of tobacco of about 10½d. The cost of the competing imported tobacco, with a duty of 3s., is 4s. That gives a tremendous margin of protection to the local grower. If we reduce the production by growing a lighter leaf, with the possibility of expansion in the future into an export market, the yield per acre would be probably about 600 lb., and the cost of production ls. 2d. per lb. That would still leave a very big margin. The margin, with a yield of 800 lb. per acre, is 3s. l£d., and with 600 lb. per acre, 2s. 10d., and to increase the margin would need a great deal of justification. Surely that margin is sufficient to enable the industry to develop.

The Government believes that it has approached the problem properly, having in mind the need of revenue. Th© margin is high. The facts as given by the Tariff Board show the rate of tariff protection to be more than 300 per cent.

Mr Thompson:

– That has been disproved over and over again. It was disproved by the select committee on tobacco.

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– The Tariff Board has investigated the subject very thoroughly. It is not an extraordinarily difficult subject to investigate. The need was to obtain reliable statistics, and America is really most efficient in the production of statistics. We had only to obtain particulars of the cost of tobacco in America, and of freights and exchange. The sum is a perfectly simple one. It is easy to ascertain what it costs to bring the imported article into this country. Having discovered that the percentage of protection can be easily calculated, the Tariff Board has made the necessary investigation, and it is useless for honorable members to say that the board is wrong. This is not a technical matter. Honorable members might have some justification for arguing that the Tariff Board does not know everything about the technique of the tobacco industry: but it cannot be suggested that the board is unable to obtain facts and make calculations to determine the exact percentage of protection that is being afforded to the industry. I refuse to accept the objection that we cannot rely on the figures submitted by the board. The country has been covered with prospectuses giving facts and. figures respecting the amazing prospects of the tobacco industry. It is beyond dispute that the protection of 5s. 2d. has made it most attractive, and we have to consider whether that is good for the country generally.

The Government has viewed the subject from two angles. We looked at it first from the angle of revenue, and then from the angle of the industry’s requirements. If the high duty remained as is advocated by some honorable members, it would be the worst thing that could be done to the industry. It has expanded in one year from 2,000,000 lb. to 10,000,000 lb. Our total consumption is possibly from 14,000,000 lb. to 16,000,000 lb., and it is possible that we may produce the whole qf the Australian tobacco requirements within a year or two.

A number of honorable gentlemen have tried to make capital of the argument that we should expand our production. Possibly, some of them, speaking from public platforms throughout the country, will try to win the favour of the electors by declaring that the proposals of the Government in regard to the tobacco industry are detrimental to the interests of the Australian growers; but it will be most dishonest if that is said of the course that we have taken. If there is one country in the world which has had a sorry experience of the folly of expanding production without regard to the possibility of obtaining a market for the surplus, it is Australia. We have many times had to face the problems that this heedlessness has created. We had a crisis from this cause in the dried fruits industry; another in the sugar industry; and another in the wine industry; indeed, there are’ few commodities which we export in respect of which we have not had to face this problem in some form. Yet it is now proposed, in all seriousness, that we should recklessly head the tobacco industry in the direction of excessive production. To do sp would be disastrous to those persons who had been lured into this industry by the false promise of prosperity for all who might embark in it. Were we to pursue the policy which our critics demand, irretrievable ruin would fall upon very many unfortunate growers. Those who are now denouncing the Government for the policy it has adopted will live to bless those whom they are cursing.

Mr Thompson:

– The tobacco-growers are cursing the Government.

Mr BRUCE:
FLINDERS, VICTORIA · NAT; UAP from 1931

– If the tobacco-growers follow the honorable member, he will prove a false leader to them in this respect, and they will live to curse him. The advocates of the Opposition plan for stimulating the tobacco-growing industry have drawn a brightly coloured picture of an expanding industry which will bring prosperity to thousands of producers. They foresee the time when we shall grow all the tobacco which is required on the Australian market, and, in addition, have large quantities which will be sold overseas. The Leader of the Country party became almost eloquent about the prospects of the industry. I shall deal with several of the reasons which he used in support of his proposals. He said, first of all, that we should increase our efficiency. That sounds well, of course, but will the right honorable member say that we are not already increasing our efficiency? We should be thankful that the efficiency of this industry is being increased every year. Thirty-five per cent, of the last crop was bright leaf tobacco. But if we were to adopt a policy which would bring about an increased over-production consequent upon unjustifiable stimulation, all incen-t,ive to efficiency would disappear. Growers would become slack in their methods, and would concentrate on getting a big production, with little regard for quality. We should get a poorer class of tobacco, and the production of first class quality leaf would drop. The policy which the right honorable member has advocated would certainly not.increase efficiency.

The next argument in support of the Opposition proposal is that it would lead to increased production. But the high authority from which the right honorable gentleman quoted would not advocate production for production’s sake. We must seek to produce tobacco of a quality which can be sold on the world’s market. The Opposition policy would not stimulate the production of this class of tobacco. It was next said that the acceptance of the Opposition scheme would make tobacco available at a cheaper price; but our first duty is surely to increase the quality of our product. The right honorable gentleman next said that we should prepare for an export trade. That is very true; but, before we can even think of exporting, we must get our costs of production down. The Minister for Trade and Customs has shown us this morning that, even if we receive preferential treatment from Great Britain, we should have to get our price down to ls. 7d. per lb. If we are thinking of doing business on the world’s market, we must be in a position to sell our product abroad for ls. per lb. Unless we can achieve something like these figures, it is absurd to talk about building up an export trade. I suggest that it is folly for us to make the conditions in this industry so attractive that people will rush pell-mell into tobacco production. The duties which were in operation prior to the tabling of this schedule left a very big margin of profit for the local grower, and encouraged people to rush in and plant tobacco in very many places. But, if tobacco is grown on unsuitable soil and under unfavorable conditions, and on land the price of which has soared, imposing on the purchasers a very big interest burden, the unfortunate producers will ultimately be ruined. The sensible thing for us to do is to encourage the expansion of this industry on rational lines, which will make possible the building up of an export trade. If the question of revenue were not involved in this problem, it would still be criminal for us to allow the producers to continue their operations under the artificial stimulation that has hitherto prevailed.

But we have the revenue problem to consider. Every honorable member seems to admit that the revenue must be maintained, but it is suggested by the opponents of these duties that this could be done by steadily adjusting the » incidence of the taxation as between customs and excise duties. Of course, unless that is done, tobacco-growing will disappear as an Australian industry. But it must be borne in mind that, while this adjustment is taking place, there must be a continual improvement in the quality of our product and in the efficiency of om industry. The cost of production must be kept down, because otherwise the. number of smokers in Australia will lessen, because the cost of tobacco will have become too high. It has been said that we must ensure to the grower a return of 3s. per lb. I suggest that that is a handsome margin of profit, and more than is gained in other rural industries. But the policy which honorable members opposite advocate cannot be applied effectively, even taking their own calculations as the basis of the argument. Each time the excise duty is increased to meet our new requirements, the price of tobacco will go up, if the 3s. margin is to be retained for the grower, and thus, sooner or later, the local market for tobacco will be reduced because of the lessening of consumption. “We cannot develop the industry by maintaining the present artificially high prices. The duty of 5s. 2d. per lb. is undoubtedly excessive, but it must be made higher if the excise duty is not increased. No one can dispute that.

It has also been suggested that there should be an increase in the excise on imported tobacco manufactured locally which would bring the charge on foreign tobacco up to 8s. 4d. per lb. If a step like that were taken, we should imperil the whole industry by diminishing the market for tobacco. Further, if a differentiation were made between the excise on Australian and that on foreign tobacco, a new principle would be adopted, if the policy of the Opposition were adopted, a much larger quantity of immature Australian tobacco would undoubtedly come into consumption. It is estimated that 6,000,000 lb. of Australian tobacco will be marketed this year. It is true that, as between the Opposition and Government schemes, there will be a difference in revenue of only £16,000, on a basis of a crop of 6,000,000 lb. If the 6,000,000 lb. figure were exceeded by 1,000,000 lb,, the difference between the Opposition and Government schemes, from the revenue point of view, would be £116,000, and, if it were exceeded by 2,000,000 lb., that difference would be £216,000. The Opposition argument is based upon the assumption that the production of Australian tobacco will not be greater than 6,000,000 lb. this year ; but, as .1 have shown, the estimated yield of tobacco for this year will be almost 10,000,000 lb. Moreover, the adoption of the Opposition scheme would certainly lead to a further large increase in the production of Australian leaf, which would at once seriously affect the revenue. For this reason alone, it is utterly impossible for the Government to accept the alternative scheme embodied in the amendment.

It has been said by some honorable members opposite that the Government has cruelly reduced the profits of the poor tobacco-growers, and that it will be the fault of the Government if the tobaccogrowers do not get the same price for their product this year as they obtained last year. I suggest that that is the most optimistic view imaginable. Last year, the production amounted to 2,000,000 lb., a quantity that was readily absorbed. The growers were in the fortunate position of almost having buyers on their doorstep for that limited quantity of tobacco. But can it be thought that there will be the same hectic competition when the Australian crop has increased to 10,000,000 lb. per annum? It is almost certain that if the Government had not altered the duty, the increase of the crop to 10,000,000 lb. would have meant that the price to the growers would have fallen to something below 2s. per lb. Under the arrangements that the Minister for Trade and Customs (Mr. Gullett) has succeeded in making with the manufacturer’s of the tobacco, the growers will receive 2s. 3d. per lb. So far from having reduced the price that the grower would receive, the probable effect of the Government’s action has been to increase it by several pence per lb. I would say . to the growers that they are in an infinitely better position under the present arrangement than they would be in if the contrary proposals of our critics were adopted. My sincere conviction is that the proposed alteration of our arrangement would immediately have an injurious effect upon the industry, and it is certain that it would be disastrous in the course of a year or two, because of over stimulation, which would result in the creation of an unexportable surplus. If there is no other justification for the action that the Government has taken, we have adopted a wise course, because it will have a steadying effect upon the industry. It will save many growers from grievous disappointment, and prevent a recurrence of the familiar problem of over production. The Government has taken a step towards putting the tobacco industry on a solid foundation, which will lead to increased efficiency, and cause growers to concentrate their efforts upon the production of bright and more saleable leaf of better quality. We have taken the course which alone offers a prospect of realizing what should be the aim of this industry, namely, the supplying of the whole of the tobacco requirements of Australia and the establishing of a valuable overseas trade.

Mr SCULLIN:
Yarra

.- The right honorable the Assistant Treasurer (Mr. Bruce) based his main contribution to the discussion on the revenue aspect of the tobacco duties, and I propose briefly to examine his arguments. It is quite true, as the right honorable gentleman, and as the Minister for Trade and Customs (Mr. Gullett) said, that the Government led by me asked the Tariff Board to investigate this matter, and also appointed a special committee to consider the position. It is also true that my Government was much concerned about the need for safeguarding the revenue. If the tobacco industry is to survive, and if the consumers are to be encouraged to buy locally-manufactured tobacco in preference to that made from imported leaf, the maintenance of the existing duty would have resulted in a serious loss of revenue. This is recognized by those engaged in the industry, by the members of the special committee, and by everybody else concerned. It was generally realized that it would be necessary to adjust the excise duties to meet the situation. The fact that the last Government carried out an investigation into the matter shows that it was concerned about the revenue aspect. But that does not prove that it would have denied the growers in Australia a sufficient margin of protection. A formula can be worked out to the very pound, if the Government so desires, by which a sufficient margin of protection can be maintained for the growers, without the loss of one penny of revenue; but that is a fact which the Government appears to have ignored. The impression that every Minister has endeavoured to convey is that the last Government recklessly disregarded the revenue position. That was the basis of the attack on the

Opposition, and on the Leader of the Country party (Dr, Earle Page).

Dr Earle Page:

– But the Assistant Treasurer admitted, in his concluding remarks, that the revenue would not be affected if the alternative proposal were adopted.

Mr SCULLIN:

– That is so. The Minister for Trade and Customs (Mr. Gullett) criticized the alternative scheme on the ground that there would be a loss of £16,000 when the local production amounted to 6,000,000 lb. of leaf, and a further, loss of £100,000 for every 1,000,000 lb. I do not dispute the Minister’s calculations, but the duties could be adjusted from time to time. We cannot lay down any formula to-day which will stand for more than twelve months. If there is to be increased use of locally-manufactured tobacco, a constant adjustment of rates will be required, probably every year, to maintain certain revenue. At a later stage, possibly, the industry will be stabilized, and the adjustment need not be carried out so frequently.

The Opposition joins with the Government, and, I think, also with the Country party, in saying that the industry must return the same revenue which it is giving to-day. The Tariff Board, in its report, said that until the local production exceeded 6,000,000 lb., the revenue would not fall below the £6,500,000 desired. Australia has not yet had an output of 6,000,000 lb. of tobacco. The crop amounted to 2,000,000 lb. last year, and the estimates for this year vary from 6,000,000 to 10,000,000 lb. ,It remains to be seen what the crop will be; nobody can accurately forecast the figures until the leaf has been sold. I have given some thought to this matter from the revenue point of view only, leaving other honorable members to consider it from other aspects. I had in mind that we should not alter the import duty, but should leave it at 5s. 2d. per lb. Then, as the industry expands, we could adjust the revenue by gradual increases in the excise duty. According to the Tariff Board’s report, our revenue will not be less than £6,500,000, until the local production exceeds 6,000,000 lb. of leaf. If the local production were to increase to 9,000,000 lb., the loss in revenue under the old duties would be £750,000 a year. To make ‘that up, an increase of ls. in the excise duty would yield £850,000. If the production increased to 10,000,000 lb. we could increase the excise duty by ls. 3d. per lb. to make up for the loss of revenue.

The Opposition is prepared to accept any scheme the Government can put forward that will maintain the present revenue, and give the old margin of protection to the Australian growers. The remarkable thing about- the attitude of the Government is that it becomes alarmed about the revenue aspect, and yet its first act is to deduct -2s. per lb. from the import duty. The first immediate effect of the reduction of the import duty by 2s. per lb. is a considerable loss of revenue. There is now a loss of 2s. per lb. on imported tobacco, without any compensating advantage except that obtained at the expense of the Australian growers. The Government, having lost revenue on imports, has sought to recoup that loss by increasing the excise duty to that extent. Not one penny of increased taxation has been imposed on imported loaf. This means a reduction of the margin of difference between the retail prices of home-grown and imported tobacco, and owing to the prejudice that prevails, the consumers will purchase the imported article in preference to the locallygrown product. It is asked whether a protective duty of 5s. 2d. per lb. is required? The present landed’ price of imported leaf is a little over ls. per lb. If a duty of 5s. 2d. per lb. were added to the landed cost, and an attempt were made by the growers to get an advantage of 6s. per lb., I would certainly favour a reduction of the import duty; but this is an industry that is not taking full advantage of the present duties. It has received an average price of 3s. per lb. for its product, and that is an important fact to remember. It may be said that there is still a prejudice against Australian leaf; but if the industry were taking full advantage of a duty of 5s. 2d. per lb. to raise local prices, I would not support its request. If the growers are content with 3s. per lb., it may be asked why they want a protective duty of 5s. 2d. per lb.

Everybody knows that apart from the relative qualities of tobacco, tastes for particular sorts arc acquired by using them. Smokers are in the habit of buying the tobacco for which they have acquired a taste; but we must give them an incentive to use Australian tobaccoes by providing a margin of difference between the prices of the local and the imported article. Tobacconists told me some time ago that they could not supply all the orders received by them for Australian tobacco. Owing to the old duties, there was undoubtedly a swing over from American to Australian leaf, and the reason, in the first instance, was that the local article was the cheaper. If we remove that margin of difference, so that imported tobacco can be sold at almost the same price as the local article, we may bid good-bye to any hope of establishing the Australian industry on a permanent basis. For 70 years an attempt has been made to build up the local industry on a large scale. I recognize that it is unreasonable to ask that high duties should be maintained permanently; but while the industry is seeking to overcome its initial difficulties, including the prejudice against the use of locally-grown tobacco, the problems associated with clearing tobacco land, the choice of the right soil, experimentation with seed, and the treatment of diseases which are practically new to Australia, the industry should be encouraged by high protective duties. The falling of the axe upon them when they are about to harvest their first real crop is a calamity. I have been handed a telegram addressed to Mr. Sambell, secretary of the Victorian Tobacco Growers Association, stating that the growers in Northern Queensland have been informed that the combine intends to buy only 20 per cent, of their crop. When I was last travelling to Melbourne I met a tobacco-grower from Myrtleford, who told me that he had grave doubt that the growers would be able to market their crop. I hope this pessimism is not justified, but it is obvious that the eagerness of the tobacco company to huy the Australian leaf last year was due solely to the fact that the duties imposed by my Government made the imported leaf too dear. The principal fact emerging from this debate is that the present Government has struck a blow at Aus tralian tobacco only. What is the reason for its tender regard for the product of black labour in other countries? If the Government needs additional revenue it should impose higher excise duties on Australian and foreign tobacco alike, leaving last year’s margin of protection unaltered, at least until the local growers have become firmly established. The AssistantTreasurer (Mr. Bruce) used the phrases “ over stimulation “, and - “ hectic competition “. Until recently about 90 per cent, of Australia’s requirements of tobacco was imported. Last year the local production was approximately 2,000,000 lb., about one-twelfth of our requirements. This year, the local production is estimated at from 6,000,000 lb. to 10,000,000 lb., or about onethird to one-half of the total requirements. Why then does the Minister fear over-production? The right honorable gentleman said that if we were to maintain the duty at 5s. 2d. per lb., and obtain the required revenue by excise duty, the price of tobacco would soar so high that people could not afford to smoke it. But later he said that if the production this year reached 10,000,000 lb., the market would fall, and there would be hectic competition amongst the sellers. The right honorable gentleman cannot have it both ways. Probably the prices for the local leaf will be steadied by competition when the industry is in full production. Such competition will regulate the market and we will not fear soaring prices. When the industry has become established, has secured the local market, has reduced its initial overhead expenses, and has settled down on an even keel, it will probably be able to meet the lower prices due to local competition. It should not, however, be required to accept lower prices consequent upon a reduction of the import duties. We are told that but for the reduction proposed by the Government the total tax on the imported tobacco would be 8s. 4d. per lb. Tobacco in Great Britain has to pay a duty of 9s. 6d. per lb., although there is no local industry to be protected. I would prefer to vote for a proposal to leave the import duty at 5s. 2d. and to increase the excise to whatever amount might be necessary to make good the loss of revenue due to the expansion of the local industry.

But ‘the amendment moved by the honorable member for New England (Mr. Thompson) is practically the same in effect and, therefore, I shall support it.

Mr HUTCHINSON:
Indi

.- Because I represent one of the principal tobacco-growing districts in Australia, and frequent reference has been made during this debate to my attitude to the industry, I feel impelled to define my position. I deplore the suggestion that there has been some collusion between the Minister for Trade and Customs and the British-Australasian Tobacco Company to the disadvantage of the growers. Every honorable member must know that there is no . justification for such a suggestion. I do not hold a brief for that company, nor do I know very much about it,’ but Dr. B. T. Dickson stated in a lecture a few days ago that the support given by the British-Australasian Tobacco Company, had been a great stimulus to Australian tobacco culture. The select committee on the industry also paid a similar tribute to the company.

On an earlier occasion I stated my attitude towards the tariff generally. I do not believe in extreme duties for either primary or secondary industries. During the election campaign I expressed myself in favour of adequate protection for the tobacco-growing industry, but on more than one occasion said that I would need to know more about it before committing myself to any particular rate of duty. In this House I stressed the dangers of extreme protection, and kindly references to my speech were made by the honorable member for Corangamite (Mr. Gibson) and the honorable member for Swan (Mr. Gregory). Those dangers are alreadyapparent in the tobacco industry, and I arn confident that, had the duties imposed by the Scullin Ministry continued for a period of years, disaster would have overtaken the growers. Inflated values arealready in evidence and they lead to overcapitalization and high cost of production. If the tobacco industry is to expand and be able to export, the cost of production must be kept low. Dr. Dickson also stressed the fact that climate and lands must be suitable for successful tobaccogrowing, and I am afraid that under boom conditions sufficient selectivity in respect of lands would not be observed.

Therefore, I do not believe that the continuance for a period of years of the high protection given by the Scullin Ministry would have been to the benefit of the growers. The duties would have to be lowered eventually, but I have consistently objected to their reduction before the present season’s crop is marketed. Almost immediately after my election to this Parliament I represented to the Minister for Trade and Customs, and the Attorney-General (Mr. Latham), the only Ministers I knew at that time, the desirability of continuing the old rate of protection until the growers had sold this season’s crop. I said .that the growers should be able to reap what they had sown under the former rates of duty. Many of them had entered the industry on the assumption that those duties would continue until at least this season’s crop had been harvested. They are men of a type that we should encourage. Some left the ranks of the unemployed and invested their small capital in this industry, preferring to produce something- of value rather than remain in idleness and live on the demoralizing dole. I urged that the new growers should be protected against the loss of their capital, and the community from further increase of unemployment, and I stressed the need for encouraging an industry that would utilize the poorer classes of land and support in comfort a man and his family on a small area. The Government should not have reduced the duties this year, but should have allowed the growers the benefit of them for this season’s crop. I have urged that continuously ever since I was elected. But I am not sure that the growers will not be better off under the agreement that has been made than under the old duties. “We know what happens in every primary industry when the production exceeds the current demand. A large quantity of the Australian leaf produced this year cannobe put into consumption very soon. Even the honorable member for New England (Mr. Thompson) will admit that at least ten years will be required to wean the Australian smoker from the imported leaf, and had the old duties continued, there was a danger that the buyers would hold back and force men with small capital to accept low prices. That. is a common practice in all primary industries. Therefore, with a guarantee of 2s. 3d. per lb., for a large proportion of their crop, the growers may be better off under the agreement than they would have been with the old rate of duty and an open market.

It has been said that only a portion of the Queensland crop will be sold this year. Whether that is true I do not know, but we should endeavour to make it possible for the growers to sell as much of this year’s crop as possible.

I am at a loss to understand the attitude of the Country party on this matter. I do not say this with any animus, but it appears to me that members of the Country party are unable to rid themselves of sectional influences, and are unable to put before the country a sound consistent policy of tariff reform. I urge the Government to give further consideration to this matter. I urge it, either to allow the present duty to remain or to accept the suggestion put forward by the Victorian Tobacco-Growers Association. If a satisfactory arrangement can be made for this season’s crop, the growers will willingly face a reduction of duty next year. Individual growers have told me that the present duties are too high, and that they do not expect them to continue.

The Government has taken up an extraordinary attitude over this item; it has chosen to make of the matter a vital financial issue. I realize how essential it is to obtain revenue, and to balance the budget, if that be possible,. If this item is to be made a vital financial issue, I shall support the Government. I am not one of those who speak in favour of a certain thing and then vote against it. Sometimes a member of this House is forced to choose between his district and the nation. Is any one justified at the present time in opposing his personal interests or ambitions as a politician to the interests of Australia as a whole? When a choice of this kind has to be made, I will stand by the nation. I have not been subjected to any urging or cajoling to influence my decision. I hope that the occasion will never arise, either in this House or outside, when I shall fail to do my duty to the nation as I see it.

Mr PATERSON:
Gippsland

.- I listened with close attention to the speech made this afternoon by the Assistant Treasurer (Mr. Bruce). He said that no one could possibly defend a duty of more than 3s. per lb. on a commodity, the price of which was less than ls. per lb. Ordinarily, I would agree with that proposition, and would have no time whatever for a duty which ranged as high as 300 per cent. There is, however, one argument, and one only, that appeals to me as offering a sound reason for urging the extension of the present margin of 3s. per lb. between excise duty on Australian and American tobaccoes. I do not agree with all the arguments which have been advanced against the Government’s proposal, and the fact that tobaccogrowing is a primary industry does not, in itself, appeal to me as a sufficient reason for according it more generous protection than I would to a secondary industry established in the city.

I am impressed by the absolute necessity for restoring the former retail price margin that existed between Australian and imported tobaccoes. I am informedthat American tobacco costs, retail, ls. lOd. and upwards for a 2-oz. tin, and that Australian tobacco, before the alterations in duty, could be obtained at ls. 4d. a tin. That is a difference of 3d. per oz.’, or 4s. per lb. We should preserve that margin for at least another twelve months as a means of weaning away from American tobacco those smokers who at present prefer it. A substantial difference in price would probably be a great incentive to smokers to change over from American to Australian tobacco. Being a non-smoker, I speak without any practical knowledge of this matter, but

I believe that once the Australian public got into the habit of smoking Australian tobacco, they would go on buying it’ in preference to Virginian leaf, even though the price were practically the same. The Minister himself indicated the strength of this argument when he asked for a show of hands from those honorable members who smoked Australian tobacco. The response was a meagre one, and seemed to accord with his expectations. That bears out my contention that, for some time at least, a wide margin is necessary between the prices of Australian and American tobaccoes to enable the taste for Australian tobacco to be cultivated. “With the public taste for Australian tobacco unformed as it is at present, a reduction in the price margin between Australian and American tobaccoes will probably induce many smokers, who have only recently begun to smoke Australian leaf, to switch over once more to American tobacco. It would be a calamity if this occurred to check the process of winning fresh recruits to the ranks of those who smoke Australian tobacco.

We heard something from the Minister this morning, and more from the Assistant Treasurer (Mr. Bruce) this afternoon, about the revenue position, and how it is affected by tobacco duties. It seems to me that more has been made out of that than is justified. We all agree that the full amount of revenue must be obtained from tobacco; there is no difference of opinion on that issue. The only difference is regarding the method by which it is to be obtained. We were told this afternoon that a new proposal had been put forward by the Victorian Tobacco Growers Association that there should be an excise duty of 3s. 9d. per lb. on Australian leaf, and a duty of 5s. 6d. on American leaf. It is admitted, I think, that on the basis of the anticipated crop for this year, such an arrangement would furnish as much revenue as would be provided under the Government’s proposal. The Minister expressed the fear that, if the total impost on American leaf were increased to 8s. 6d. per lb., there would be a danger of a reduction in the consumption of tobacco with a consequent falling off in the revenue obtained. My reply is that, while under our proposal the taxation on American leaf would undoubtedly be raised, that on Australian leaf would be correspondingly lower, and Australian tobacco would be cheaper. The one would balance the other, and the only effect would be to make a wider price margin between the two tobaccoes. The smoker with a slender purse could buy Australian tobacco at a low price, while the man with plenty of money could buy American tobacco at a higher price. The average price would be the same as now. I believe that, as soon as the taste for Australian tobacco is generally acquired, a margin of 3s. will be more than adequate. I should be satisfied if the Government would accept an amendment providing for a reasonable difference between the excise rates on American and Australian leaf for a period of twelve months only. That would give at least another twelve months for the formation of a public taste for Australian tobacco.

Mr WATSON:
Fremantle

.-1 have no particular qualification for discussing this subject. I know nothing about tobacco. I do not smoke it, chew it, grow it, buy it, or sell it. This is the first time during this Parliament that I have had the slightest doubt as to how I should vote in the interests of the people of Australia. On the present occasion I am bewildered and puzzled. If I vote against the Government’s proposal, I may be helping to bring about a boom in tobacco land values, and ultimately the over production of tobacco, with all the evils attendant upon such an occurrence. Booms in values, especially of land, have been the curse of Australia, and, above all, I wish to cast my vote to prevent such a thing from happening. Again, in voting for the Government’s proposal, I may be assisting a monopoly or combine, and that I am most anxious not to do. If the issue lies between the producers and the combines, I am for the producers. I have just spent a considerable sum of money in crushing a combine. I have been against combines all my life, because they inevitably work against the interests of Australia. I shall support any and every measure calculated to reduce the cost of living and production, and to prevent a boom from taking place as a result of increased basic values. Our trouble to-day is that money is not doing its work. We have plenty of money, but it is practically lying idle. Every £1 that we have should be doing the work of £4. I shall support revenue duties when I am satisfied that the revenue will be judiciously spent. I shall gladly vote for a duty that will increase the production of wealth, especially exportable wealth. If we retain the duty of 5s. 2d. per lb., our production .of tobacco will soon over- take Australia’s requirements. In that event, the industry will soon be in the same position as the sugar, dairying, and other industries. We shall not know what to do with our production, and the people will have to pay about £» per lb. in order to make up the loss on the exportable surplus of tobacco.

I shall vote against any duty that has a political significance, because such a duty is dangerous. We have three species of duties. The revenue duty is designed to provide wealth for essential services. Some persons who control the expenditure of governmental revenues have a remarkable idea of what are essential services, and in many instances moneys axe unwisely expended. Political duties are dangerous inasmuch as they usually result in the land-owner obtaining his wealth by taking’ it out of some one else’s pocket rather than malting it by the cultivation of the soil. There are many retired land-owners living in Brisbane, and in the other capita] cities of Australia, as a result of the operation of the sugar agreement. When in Brisbane last year I was told by an agent from Mackay that he had sold 252 acres of sugar land, with crop standing, for £74,000. Such duties are dangerous, also, because they induce manufacturers to devote their energies, not to the manufacture of goods which help us to meet our obligations, but to manufacturing for over capitalized companies, to exploit the people.

I have listened attentively to the various speeches, and, after weighing them carefully, have decided on this occasion to vote with the Government.

Mr PROWSE:
Forrest

.- The speeches of the last two honorable members have been rather singular, and I found difficulty in following that of the honorable member for Indi (Mr. Hutchinson). He castigated the Country party for its views, and then said that the Government was making a mistake in introducing this alteration of the tariff; that it would inflict an injustice upon the growers if they were not permitted to sell their crop under the tariff which was operating when they planted it. That is the view of this party. But the honorable member qualified his remarks by saying that the financial position had given the tariff a national aspect. He makes financial considerations an excuse for inflicting a palpable injustice upon the growers. Surely that is not a high and lofty action. The tariff introduced by the Scullin Government attracted many people to the tobacco industry, and an injustice will be done to them if this alteration is agreed to. I am surprised that the Assistant Treasurer (Mr. Bruce), of whom I have always had a high opinion, does not realize the injustice that this alteration is inflicting upon the tobacco-growers now that they have committed themselves to a heavy expenditure. -He has charged us with luring them into the industry ; but surely the luring was done by the action of this Parliament. Wc wanted the people to develop this industry. They have done no wrong, so why should they be punished? Why let the axe fall upon them before they can reap the advantage that was in the first, place offered to them ? My conscience certainly would not allow me to support an alteration in the tariff which would react cruelly upon the tobacco-producers. . The honorable member for Fremantle (Mr. Watson) spoke of the revenue that would be derived under the Government’s proposal ; but the whole contention of the members of the Country party is that the revenue required by the Government should be obtained from the locally-grown tobacco. If this alteration is agreed to, this Parliament will be selling itself to a great, combine, and inflicting an injustice upon a section of our primary producers.

Mr MARTENS:
Herbert

.- As a member of the select committee on tobacco, I heard the whole of the evidence that, was placed before it. I know what the growers were told by the chairman and other members of that committee. The position was thoroughly understood by the deputation which recently met the Minister for Trade and Customs (Mr. Gullett) in Canberra. Those growers knew that any decrease in revenue from imports would have to be made up by an additional tax upon local production. It has been suggested that an agreement has been entered into between the Minister and the British-Australasian Tobacco Company, under which the company guarantees to purchase a certain quantity of Australian-grown tobacco, “subject to quality “. I have a keen recollection of evidence that was given before the committee to the effect that the company absolutely refused to buy Australiangrown tobacco on the ground that it was not of the required quality. The growers are subject to the dictates and decisions of the buyer for that company. The Leader of the Opposition (Mr. Scullin) quoted a telegram that had been sent to him by Mr. Darling, of the Victorian branch of the Tobacco-growers Association. That gentleman gave evidence before the select committee. The telegram stated that 20 per cent. of the tobacco crop would be purchased by the British-Australasian Tobacco Company. It is easy to understand that that is quite likely to happen. It is true, as has been stated by the honorable member for Indi (Mr. Hutchinson), that the Tariff Board in its report referred to that company; but he knows quite well that the abnormal growth of the tobacco industry is the result of the tariff schedule introduced by the Scullin Government-. When the honorable member for Darling Downs (Sir Littleton Groom) was speaking, one honorable member interjected, “Did the growers believe that the tariff protection afforded the industry would be permanent?” They did not, nor had they the right to think that. They were told the exact position. What they did believe, and what would have happened had the Scullin Government remained in office, was that any loss of revenue on imported tobacco would have been met by an additional tax on local production.

It has been suggested that 10,000,000 lb. of tobacco will be harvested in Australia this year; but no one has any reliable basis for the making of such a statement. I do not think that Dr. Dickson would support that view. Blue mould has appeared in several localities, and within a few days it may almost entirely destroy a crop. No justification has been advanced for the alteration of these duties. A deputation of tobacco-growers waited on the Minister some little time ago to urge him to review his decision, if only for this year; but, evidently, the appeal fell on deaf ears. Many of the people who are tobacco-growing in my electorate have sunk all their savings in their enterprise, and have mortgaged their properties up to the hilt, because they expected that the conditions which obtained when they began operations would continue for at -least a sufficient time to enable them to become established. These people had first to clear their land, and then to set up their plant and general equipment; and they were entitled to expect fair treatment from the Government. They went off the labour market because they believed that by so doing they would at once help to reduce unemployment in Australia and establish a valuable industry here I heartily support the view of the honorable member for Gippsland (Mr. Paterson) that the people engaged in tobacco-growing should be allowed to harvest the coming crop under the old conditions. If they could do so, their hardships would be reduced considerably. As a member of the select committee on the tobacco industry, I, with my colleagues, interviewed the then Minister for Trade and Customs (Mr. Forde), and advanced the suggestion that instead of making any radical alteration the Government should adjust the customs and excise duties in such a way as to preserve the revenue position. Practically all the growers who gave evidence before the select committee intimated that if they could be assured of 2s. or 2s. 6d. per lb. for a regular crop, they would be able to do reasonably well; but it was not suggested at any time that they would ever be able to produce the whole of Australia’s tobacco requirements. It is very well known that every country which grows tobacco is obliged to import a certain quantity of foreign leaf for blending purposes, and that will always be so in Australia. We all hope that the time will come when we shall be able to manufacture, from Australian-grown leaf, most of the tobacco that we require, and when that time comes, there will have to be a re-adjustment of excise and customs duties.

The following extract is from a newspaper report, entitled “ The Tobacco Blunder “ : -

The proposal, as stated by the President of the Victorian Tobacco-Growers Association (Mr. F. B. Darling), is that the excise duty on imported leaf used in Australia will 6s. lid. per lb., and the excise duty on Australian leaf 3s. Od. per lb. A new factor has now entered into the problem with the adverse seasonal conditions, which, in the Goulburn Valley alone, is calculated to reduce the estimated yield by one-third.

In other words blue mould is actually imperilling the tobacco crop in certain districts. At least half the crop may be wiped out by this scourge. Our scientists are doing their very best to counter the pest, but so far they have not had great success.

Even if 8,000,000 lb. of tobacco leaf is harvested in Australia this year, it will yield only 6,400,000 lb. of leaf for excise purpose after it has been stemmed and made ready for manufacture. In this circumstance, I appeal to the Government to review, even at this late hour, its decision to enforce these altered conditions upon the industry. It could protect the revenue aspect by adjusting the excise duty. There is every justification for the making of this request, and though it appears that the Government has .the numbers to force through the item now before the committee, I hope that it will not do so. Tlie suspension of the proposal for a year would not involve the revenue in any serious loss, but it would give the tobaccogrowers an opportunity to re-adjust themselves to new conditions.

It has been stated by the Minister for Railways and Transport in Queensland, Mr. Godfrey Morgan, that the Minister for Trade and Customs has acted in collusion with the British-Australasian Tobacco Company in this matter. That company has shown profits exceeding £1,000,0.00 in each of the last two years, notwithstanding the depression, yet the Government is still further helping it by giving it authority to say to the growers that their tobacco is not of the quality required. A Mr. Muller, who gave evidence before the select committee on this industry, said that for two or three years the British-Australasian Tobacco Company had accepted his tobacco with- « out question ; but, because he had had the temerity to insist upon his rights, he was subjected to treatment which was not creditable to the company. Why should the Government desire to assist this big combine? The company has large quantities of American tobacco leaf on the water at present, and, when this arrives, it will think it has greater justification for refusing to accept Australian-grown leaf.

The Assistant Treasurer (Mr. Bruce) has stated that only 2,000,000 lb. of Australiangrown tobacco was consumed last year, and that that was the reason why” such a high price was available for it. One of the buyers of the BritishAustralasian Tobacco Company, who lives at Texas, stressed, in the evidence he gave before the select committee, that in the transition period, when our smoking public was changing from imported to Australian-grown tobacco, it would be necessary to adopt very severe measures to prevent the influx of imported tobacco into Australia. We know very well that, when tobacco culture was first undertaken in Rhodesia, the people disliked the aroma and flavour of the locallyproduced leaf; but to-day almost 100 per cent, of the tobacco consumed in that country is produced there. If honorable members would visit the head-quarters of the Council for Scientific and Industrial Research Dr. Dickson would be very glad to show them samples of Australiangrown leaf, and they would find that it compares very favorably with the best Virginian leaf. I suggest, also, that they should visit the Kensington cigarettemanufacturing establishment in Sydney to further increase their knowledge on this subject. They will then be able to realize the phenomenal advances that have been made in tobacco culture in Australia within a few years. There can be no dispute about the efficiency and progressiveness of our Australian tobaccogrowers. One might imagine, from statements that have been made during this debate, that practically the whole of the American tobacco is bright lemon or bright mahogany; but the fact is that only 20 per cent, of the production is of that quality. Many experts in Australia, including Mr. Howell, of Mareeba, Mr. Pollock, Director of Agriculture under the Queensland Government, of Townsville, and Mr. Tregenna, the New South Wales tobacco expert, have said that it is quite possible to produce 90 per cent, of bright lemon or bright mahogany leaf from some of our centres of production. We know that this high quality leaf can be produced at

Pomonal, Myrtleford, Wangaratta, and other places, although in some parts adverse winds seriously affect the crops. As one who had the opportunity, while a member of the select committee on the tobacco industry, to visit the tobacco-growing areas of Australia, I have no hesitation in saying that we are able to produce in Australia tobacco leaf of the finest quality. The ex-member for Darling Downs, Mr. Morgan, who is a tobacco connoisseur, sampled . some tobacco grown at Home Hill, in my electorate, and expressed the opinion that it had almost a Turkish flavour. Mr. Bayliss, the grower of that tobacco, has shown that he is capable of producing the very best quality product. Some honorable members of this House have also sampled his product, and expressed a favorable opinion as to its quality. There can be no doubt that we are able to grow good tobacco in Australia, and we should make the conditions such that the producers can carry on their operations under reasonable conditions. When our output of tobacco increases, we can. adjust the excise and customs duties so as to ensure to the Government the revenue which it is entitled to expect from this source.

The honorable member for Fremantle (Mr. Watson) spoke about the inflation that has occurred in the value of tobacco lands. I point out to him that, in Queensland, 100,000 acres of land suitable for tobacco cultivation has been made available by the Government at a rental of 2s. 6d. per acre per annum for ten years, on the condition that the tenants reside on their properties for five years. That condition was fixed to prevent speculation in tobacco lands. A boom in land has occurred, but it has been brought about by private persons who have sold at- prices which will not enable”’ the growers to produce tobacco profitably. In North Queensland, an area of about 1,000,000 acres of land suitable for the production of leaf of high quality is available. Even at this late hour, I appeal to the Government to restore to the tobacco-growers, for the present year, the tariff conditions which obtained when they planted their crops.

Mr. E. F. HARRISON (Bendigo) who have taken up tobacco culture this year for the first time. During a period of sixteen months, five tarin’ changes have occurred. Producers in my own electorate, anxious to recoup the losses sustained by them in growing tomatoes, have launched out on the tobacco-growing industry, and some of them have obtained better crops than were anticipated. Their capital expenditure, in a large measure, would have been returned to them if the old tariff arrangement had been maintained; but owing to the alteration in duties, it will be somewhat difficult for the smaller growers to be financially successful in this year’s operations. The position of the tobacco industry has suddenly become an important issue, because’ the local production has increased from 2,000,000 lb. last year to 10,800,000 lb., as approximately estimated by Dr. Dickson. That is an unprecedented increase. It is necessary immediately to prevent over-production of tobacco. Assuming that the output next year increases to the same extent as this year, next year’s crop will be about 18,000,000 lb., which is more than Australia’s actual requirements. I should have been glad if the Government had seen its way clear to continue the arrangement made by the Scullin Government until the present crop is harvested. There is a feeling among the growers that they have not been fairly treated, but that, I think, is largely due to the conditions under which the emergency duty of 5s. 2d. per . lb. was placed on imported leaf. That duty was, no doubt, imposed to rectify the adverse trade balance; but as the man on. the land is often too busy to read the newspapers as closely as i city dwellers peruse them, he probably thought that the duty was intended to be permanent.

Mr FORDE:

– That was not the object of the duty. Prohibitions and rationing were imposed for the purpose of correcting the adverse trade balance.

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– If I misunderstood the position, how much more likely is it that mcn in the country failed to appreciate the exact situation? At any rate, the growers were misled, and they now feel that they have been unfairly treated through not receiving sufficient notice of the alteration. I regret that on account of the financial position, the Government is not able to maintain the 5s. 2d. per lb. duty for the present year; but realizing that in the national interest the Government has been forced to take this stand, I shall support it.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

.- The honorable member who has just resumed his seat has made a surprising admission, in expressing his intention to support the Government in the action it has taken, although the arguments advanced by him justified a castigation of the Ministry for doing an injury to the tobacco-growers during their harvesting operations. He admitted that the claims of the growers demanded reasonable consideration, but lie said that the Government had acted wisely in reducing the import duty in order to meet the financial situation. Under the alternative scheme, which was debated at length some time ago, it was shown that, instead of a decreased revenue, there would have been an increased return this year amounting to about £30,000. The Minister varied that statement to-day, and remarked that, under the alternative scheme, the Government would have lost - to use his own words- only £16,000.

Mr Gullett:

– On the basis of 6,000,000 lb. of excisable tobacco.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– If the Government refuses to take notice of the representations made on behalf of a big body of primary producers, and alters the tariff while their harvesting operations are in progress, I say emphatically that its action is ill advised. ‘ When the subject was under consideration previously, it was promised °that the representations then made on behalf of tho growers would be given further consideration. I did not accept that assurance, because I thought then that what has now come to pass would have happened in any circumstances. I would have been prepared to have a vote taken on the matter on that occasion. Not only is the Government absolutely wedded to this alteration in the tariff, but it has been admitted in this chamber to-day that the tobacco duties are to be regarded as raising a vital party issue. Formerly, honorable members supporting the Government were to be allowed to use their discretion on tariff matters, but now, apparently, that permission has been withdrawn. This is a sinister procedure. Are we to have a repetition of what occurred during the regime of the last Government, when we had the spectacle of its followers blindly voting with the Minister of the day, without knowing what question was before the Chair?

The CHAIRMAN:

– An honorable member may not reflect upon any vote cast in the House or in committee.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– It is, to say the least, peculiar for the Government to make a vital issue of one item in a tariff schedule containing about 700 items. If the Government were defeated on this matter, it would be incumbent upon the Minister for Trade and Customs (Mr. Gullett) to resign.

Mr Lane:

-The honorable member has a vivid imagination.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– The honorable member for Barton (Mr. Lane) does not appear to appreciate the invidious position in which he is placed, and I sincerely hope that the Government’s proposal will be defeated. The Parliament, and not the Government, should determine whether the alternative scheme to safeguard the position of the growers should be accepted.

Mr Lane:

– The honorable member does not want to go to the country.

Mr R GREEN:
RICHMOND, NEW SOUTH WALES · CP

– That possibility does not arise. The vote on this item will affect the reputation of only one Minister, and if Government supporters consider that his amour-propre is of more importance than the interests of thousands of tobacco-growers, they have a poor sense of proportion. As one who has grown tobacco with indifferent success, I know some of the difficulties associated with the industry, and I hope that to the list of pests with which the growers have to contend we are not to add the supporters of the Government. We must not forget that the only buyer of tobacco leaf is the BritishAustralasian , Tobacco Company. The Minister for Customs stated this morning that the local leaf, although improving, is still of inferior’ quality. Those honorable members who have smoked cigarettes made from Australian leaf, which had not been fully matured, will admit that they compared favorably with other cigarettes on the market. Yet I am not aware of one brand of cigarettes commercially produced from Australian leaf. The British-Australasian Tobacco Company has not played the game with the growers; it has not in the past afforded an opportunity for the Australian tobacco to become popular; but if the proposals which have been supported by the Country party are adopted the consumers will have an opportunity to test fully the local product. After the dogmatic statement by the Minister for Trade and Customs, I have no longer any hope that the Ministry will change its attitude, but I make a final appeal to the independence, if any, of members supporting the Ministry.

Mr GREGORY:
Swan

.- This debate originated in the desires of the “ honorable member for embargoes “ to win more popularity. The promises made by the Scullin Government during the last Parliament induced a large number of people to engage in the cultivation of tobacco, and for their sake I am sorry that the Government did not allow the Forde duties to remain for a period. Nevertheless, I feel that my duty to myself and the country requires that I shall support the Government on this item. I do not intend to seek concessions for any section of the community. . This Parliament has experienced too much concessionhunting in the past, and Australia cannot be developed on sound lines if that policy is continued. I have no respect for the tariff measures which the present Government has instituted, and I particularly disapprove of some of the outrageous imposts introduced by even nonLabour governments in recent years, but on this item I am bound to support the Ministry.

Mr Thompson:

– The honorable member should stay on the Government side; that is where he belongs.

Mr GREGORY:

– The honorable member for New England (Mr. Thompson) is always seeking to get members to depart from their convictions and vote in accordance with majority decisions of the party. I am not prepared to do that. I have tried to formulate a policy that will be in the best interests of the country, and I hope that in the near future we shall have a solid and compact party which will compel whatever Government is in power to reduce the costs of _ production and living. Whilst the present Government might well have delayed, for a time, the reduction of tobacco duties, so that the possibility of loss to the growers in respect to this season’s crop might be avoided, I recognize the compelling needs of the Treasury.

Mr BERNARD CORSER:
Wida Bay

– I regret that the honorable member for Swan (Mr. Gregory) cannot see fit to support his party on this item. For my part, I am wholeheartedly opposed to the action which the Government has taken in relation to the tobacco industry. Australia requires new industries that will find work for the unemployed, and none offers greater possibilities in that direction than the cultivation of tobacco. Already the industry has commenced to absorb the unemployed, and is contributing substantially to the rectification of ‘the adverse trade balance, particularly with the United States of America. A few years ago, Australia was importing annually £2,000,000 worth of tobacco leaf, and £1,000,000 worth of manufactured tobacco, although it can produce leaf of equally good flavour. Less than two years ago, the tobacco combine, which has retarded the development of the local industry, declared that Australian tobacco leaf had an ineradicable flavour of eucalyptus, and was of course quality. We know now that Australia can produce leaf of a quality superior to that of the imported article, and exceeding the earlier expectations of even the most, sanguine supporters of the industry. We have an opportunity to retain in Australia the £3,000,000 that was formerly sent to America for the purchase of tobacco, and at the same time find work for Our “people; and every reasonable man will agree that the help extended to the local industry at its initiation should be continued now. By the reduction of import duties the Government is reopening our markets to the

United States of America, which is Australia’s greatest trade enemy. After ten months of trading we had to send some millions in gold to the United States of America to correctour adverse trade balance. In order to secure a little customs revenue the Government is handing over to America a trade that should be enjoyed by Australian producers. We should close our ports to American products. The United States of America will not allow 1 lb. of Australian beef or wool, or any other product, to enter its ports. If an American vessel takes aboard at an Australian port supplies for the return trip, the unconsumed surplus must be dumped outside the three-mile limit from the American coast, because the importation of goods that can be produced in that country is prohibited. The theories by which the Commonwealth Government is endeavouring to justify its reduction of duties may seem right on paper, but they ignore the paramount need for maintaining conditions which will enable Australian growers to remain on the land. When that has been done, it will be time enough to deal with the economic difficulties which confront the industry. The Government has not considered the case of the man who starts from the survey peg, clears his land, and plants his crop. I trust that honorable members behind the Government will not vote as a machine, but will be guided by their consciences.

Mr McBRIDE:
Grey

.- I sup port the Government’s proposal I have listened to the debate on this item, and I have not yet heard any honorable member state that the growers cannot produce tobacco profitably at 2s. 3d. per lb. Seeing that under the old duty, production was increased nearly five-fold, it is probable that, were it not for the arrangement made by the Government, the growers would have to accept this year considerably less than 2s. 3d. per lb., unless an embargo were placed on the importation of tobacco from overseas. We have heard much about’ the dire results which will flow from the Government’s proposed action. Many of the steps taken by this Government during its brief life have been referred to in the same way, but, up to date, the Government’s policy has met with nothing but success. When considering the prospects of the industry to produce successfully under the tariff now proposed, we should consider the case of Canada, a country in which labour conditions are very similar to those in Australia. Moreover, Canada is immediately adjacent to the United States of America in which country, honorable members have informed us, tobacco is produced by black labour. The only protection the Canadian tobacco-growers receive against this black-grown tobacco is a duty of 1s.8d. per lb., a little more than half the protection received by Australian growers, without counting freight and exchange. I regard it as an insult, therefore, to the Australian growers to suggest that they conduct their industry so inefficiently that, although enjoying nearly twice the protection accorded the Canadian industry, they are not able to hold their own against their American competitors. We can rest assured, I think, that the policy of the Government in this regard will be in the interests, not only of Australia as a whole, but also of the growers themselves, because it will induce them to produce the best grade leaf. If they are able to get 2s. 3d. per lb. for their leaf the industry should be able to produce at a profit.

Question - That the item be postponed - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 30

NOES: 37

Majority . . 7

AYES

NOES

Question so resolved in the negative.

Item agreed to.

Item 78 (Almonds)

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

– The alteration to sub-item d relating to unshelled almonds is the inclusion of the letters n.e.i. The only change of importance is the reduction of duty on almond kernels. As compared with the 1921-28 tariff, the schedule before the committee effects two alterations. The duty on almonds in the shell is being increased from 2d. per lb., “British preference, and 3d. per lb., general, to 4d. and 6d. respectively, and provision is being made for the admission of almond kernels for the manufacture of marzipan, free of duty. The Government has endorsed those alterations. The latest proposal is to reduce the rate of duty on almond kernels from 6d. British preference, and 9d. general to 4d. and 6d. respectively, and to abolish the deferred duty which was scheduled to operate on the 1st January, 1934. The deferred rates were 9d., British and ls. general. In making these two amendments - a reduction of duty on almond kernels and the abolition of the deferred duty - the Government has been almost entirely guided by the report of the Tariff Board. The recommendation of the board has been accepted in its entirety. As honorable members are familiar with that report I do not propose to quote from it at this stage. The decision of the Government, together with the recommendations of the board to reduce the duty on almond kernels, was based on the fact that the present supply of almonds in Australia amounts only to 25 per cent, of the consumption. Had the position been reversed, I should have been disposed to allow the duties to remain as they are. But the almond is an important raw material in the manufacture particularly of confectionery, and the Government took the view that at a time when most of us are intent upon a reduction of costs generally it would be uneconomic to place a heavy tax upon imports in order to continue a local industry representing 25 per cent, of the total consumption. As a result of the action of the Scullin Government in increasing the duty on almonds and other raw materials used by confectioners, that Government felt obliged to increase also the duty on imported confectionery by 10 pur cent. It is remarkable how these increases in duty take place. The Scullin Government, quite unjustifiably, increased the duty on the raw material, and then as a matter of course increased the duty on imported confectionery. At that time, the representatives of the confectionery manufacturers waited upon the then Minister for Trade and Customs (Mr. Forde) and protested against both increases of duty. They asked that the increase of 10 per cent, on imported confectionery should be withdrawn conditional on the withdrawal of the other increase. The present Government has removed the 10 per cent, increase of duty on confectionery generally. It has also removed the prohibition on imported confectionery. It would be quite unfair to that industry, and uneconomic, to retain the high duty on imported kernels. However, the Tariff Board and* the Government recognize that the duty on almonds in shell should remain. The almonds produced in South Australia would, in a normal year, be just about sufficient to supply the demand for almonds in shell in Australia. But taking the product as a whole it is- short by 75 per cent, of the total demand. I confidently appeal to the committee to co-operate with ‘the Government in its first attempt, apart from the tobacco item, to reduce legitimately the cost, of production within the Commonwealth. As I have said, if and when the production of almonds meets a reasonable proportion of Australia’s requirements, I shall, if I still hold my present position, favorably consider either the restoration of these duties or at least the substitution of what is then a fair rate of duty.

Mr Maxwell:

– Where are most of the imported almonds grown?

Mr GULLETT:

– Mostly in countries ulong the Mediterranean.

Mr Gabb:

– This alteration of tariff will smash the local shell almond trade.

Mr GULLETT:

“No. The board has left on almond kernels a duty of 6d. per lb., which is indirectly a considerable shelter to the almond industry of Australia. We have heard a good deal in this Parliament about the need for reduced costs, and for a scientific revision of the tariff, but I trust that we shall not make a beginning in this tariff revision by allowing an unnecessary duty to remain in force. Of course, we are anxious that the production of almonds in Australia shall be profitable, but it is not proper that the orchardists and almond-growers of South Australia should be led into planting almond trees as a result of the imposition of a deferred . duty, which is subject to change, and can be removed at any time within the next seven years. It would be grossly dishonest to encourage this slow form of orchard cultivation on so uncertain a basis. I commend these proposals to the committee.

Mr FORDE:
Capricornia

.- Tho Minister has aimed a severe blow at this industry. During his speech he said that this is one of the first attempts of the Government to lower ‘the cost of production. Does he contend that a reduction in the duty on almonds of 3d: per lb. is likely to make a difference of, say, 5s. in the basic wage of this country? It is unfortunate that the first two items carrying reductions of duty affect two primary industries. ‘ The Minister, when introducing this schedule, stated that special consideration would be given to primary industries. Evidently, that special consideration is to be adverse con.sideration. South Australia, in which State almonds are largely grown, does not benefit largely from our protectionist policy. It labours under great disabili ties, and the Commonwealth Government is obliged to make it an annual grant. The almond industry of South Australia would flourish under reasonable protection. That State has a climate similar to that of the countries along the Mediterranean, which supply the world’s requirements of almonds. The Minister is making it impossible for the almondgrowers of South Australia to compete against the product of low-wage countries. He said, when bringing down this schedule, that the Government stands first for providing adequate protection for the maintenance and establishment of industries for which Australia offers a reasonable opportunity of success. Could not the almond industry of South Australia be so developed as to supply the whole of Australia’s requirements? Would Australia suffer to any extent if a prohibition were placed on imported almonds during the development of this industry? I suppose that few honorable members eat one almond a week, or even a month. This is one of the industries which the Scullin Government decided to encourage. I visited South Australia, and in company with the president of the Almond-Growers Association, inspected the almond orchards. I made a special study of the industry, and the last Government, on the representations of honorable members representing that State, decided to- give the industry adequate protection, so that it could develop, and ultimately cater, for the Australian market. The duties at that time were 4d., British preferential; 4d., intermediate, and 6d., general, and they were increased to 6d., 6d., and 9d. respectively. A deferred duty was imposed of 9d., 9d. and ls. to operate as from the 1st January, 1934, but, actually, it was not to operate until the Minister had received a favorable report from the Tariff Board to the effect that the industry could supply a reasonable proportion of the Australian requirements. I deeply regret that the deferred duty is being removed, because the almondgrowers of South Australia have been encouraged by the Commonwealth and State Governments to act upon the recommendation of the Director of Development, Mr. John Gunn, that an additional 3,000 acres should be put under almonds.

If honorable members desire full information in regard to this industry I refer them to the excellent work, The Almond in South Australia, by Mr. George Quinn, Chief Horticultural Instructor of that State.

There is a glaring anomaly in this schedule in -respect to almonds. The duties on unshelled almonds are 4d., 4d., and 6d., as in the previous schedule; but kernels, which are almonds without shells, and which are only one-third the weight of almonds with shells, are admissible under the same rates. This provision jeopardizes the position of the growers who market almonds in the shell as well as those who market almond kernels. Under the Scullin Government’s tariff, Australia was able to supply the demand for almonds in the shell, for, in 1931, our importations were only 2½ tons. The demand for almonds in the shell is limited to requirements for table use, whereas kernels are used by confectioners. The retrograde step which this Government has taken in this direction is a knock-out blow to the South Australian almond industry.. The South Australian. Director of Agriculture has been urging orchardists to put additional areas under almonds, and considerable expense has already been incurred in this direction, because the growers were under the impression that the duties fixed by the previous Government would remain in operation”. Under these new duties the Mediterranean product will be able to compete successfully against the South Australian almonds. If this proposal is agreed to, the growers will be entitled to say that they have been seriously misled. Possibly this amendment to the schedule has been introduced with the object of placating the Country party to some extent. We shall be told, no doubt, that this reduction of duties will lead to a lowering of the cost of production. But as the workers of Australia eat only about five almonds a year each, on the average, there is nothing in that contention. I make a special appeal to the Minister not to insist on this duty. The scheme for putting 3,000 acres under almonds in South Australia has been so far adopted that already 1,500 acres have been planted, and no more almond trees are at present obtainable from the nurseries of South Australia.

The almond industry was inquired into by the Tariff Board in March, 1930.

Mr Gullett:

– On the reference of the honorable member.

Mr FORDE:

– That does not absolve the present Minister from responsibility. When I referred the question to the Tariff Board I took the responsibility of adopting its recommendation or doing otherwise. I did not shelter behind the board. When the present Minister was sitting in Opposition, he used to rant and bang the table in emphasizing his assertions that the tariff proposals of the previous Government were monstrous. I shall not do that. I merely ask the honorable gentleman to give reasonable consideration to this young and thriving South Australian industry. Conditions have changed considerably since the board recommended the duties which are now being imposed. In 1927, the peak year of almond importations, 645 tons of almond kernels, paste and meal, valued at £118,963, came into Australia; but in 1931 the importations were only 220 tons. The importations of almonds in shell- in 1927 totalled 143 tons, and in 1931 only 2£ tons. Our almond production has increased, owing to the better cultural methods that have been adopted, and the planting of an additional 1,500 acres which will look after future demands. The Tariff Board, in its report on this industry in 1930, referred to the quality of our almonds in the following terms : -

The almonds are for the most part of the soft shell variety, particularly suitable for table use, and are regarded as equal in quality to any grown elsewhere.

That is a definite statement which should satisfy anybody as to the quality of our product. It has been said in this House within the last few hours that we should make our primary industries efficient. This industry is efficient. There are approximately 750 almond-growers in South Australia, and the industry is worth about £50,000 a year to that State in these depressed times. But if the growers could be assured of the whole of the normal local market, the trade would be worth £150,000 to £180,000 a year.

I impress it upon the Minister that conditions have changed very greatly since the Tariff Board made its report two years ago. When the honorable gentleman was sitting in opposition, he used the argument that conditions had changed in the twelve-month period which intervened between the making of the Tariff Board report on galvanized iron and the introduction of the new duties on that commodity, as a reason for declining to accept the duties recommended by the board. He then said -

The factors on which the board based its fi nding have so changed during the last twelve months that I do not feel safe in acting upon its report.

I invite the honorable gentleman to apply the same reasoning to the almond industry. Australia’s consumption of almond kernels in 1931 was approximately 300 tons, 220 of which were imported, the remaining 80 being Australian grown. In the same year, we consumed 300 tons of almonds in shells, 280 tons of which were supplied by South Australia. The Tariff Board has shown, beyond question, that the local almonds are of first class quality. Even if Australia could not import any almonds, but had to rely upon the Australian product, no one would be injured very greatly, for if the confectioners could not obtain almonds they could use peanuts grown in Queensland or the Northern Territory. The Mediterranean countries are unable at present to unload their crop through the usual channels, and they are inviting Australian buyers to submit an offer for their surplus. This is a position without parallel. The Australian growers are receiving replies from the largest Australian buyers to the effect that sufficient supplies of South Australian grown almonds are in hand for some time to come. It will be unfortunate if the Government permits anything to be done which will seriously impede the progress of the South Australian almond industry.

Mr CAMERON:
Barker

.- The Deputy Leader of the Opposition (Mr. Forde) has put the case for the South Australian almond-growers so well that I do not need to say very much in support of his views. South. Australia is the only State of the Commonwealth where the almond industry has been established to any considerable extent. The climatic and soil conditions there have been found to be suitable for the culture offirst class almonds. This industry had a struggling existence until a few years ago, when it was found that there was; a prospect of us supplying Australia’s requirements of almonds in the shell. But the investigation by the Director of” Development, Mr. Gunn, has shown that it is possible for us to do very much mora in this industry than has been done hitherto, and 1,500 additional acres have recently been planted with almonds in South Australia.

Mr Maxwell:

– How long do the trees take to come into full bearing?

Mr CAMERON:

– About six or seven years.When it is realized that 100 trees are planted to the acre, and that when in full bearing each tree yields 10 lb. of almonds, it will be seen that we have extended production to a very great degree. The position now is that we have entirely overtaken the demand for almonds in the shell and are producing 75 tons of kernels per annum. But unless adequate protection is granted this industry, we shall not be able to compete with the Sicilian producers of almond kernels. Labour in Sicily costs from1s. to 2s. a day, and Sicilian kernels can be landed at the store door for1s. 9d. per lb. In these circumstances it will be realized by honorable members that the protection proposed by the Government is not sufficient. It is an anomaly that the same degree of protection should be provided for both shells and kernels, because the labour involved in shelling the almonds is, in Australia at any rate, an important factor. There is a possibility of establishing a sound industry in South Australia which, in a few years, will supply the Commonwealth’s almond requirements. It should not be difficult for the Minister to adjust the rates of duty so that South Australian growers may be assured of a fair price for their kernels until the industry is satisfactorily established. In addition to the 1,500 acres already under cultivation and the 1,500 acres in process of preparation, there is a large tract of country on the river Murray at present under doradillo vines which could be better used for the production of almonds. Mr. Quinn, the South Australian horticultural expert, has proved conclusively that excellent almonds can be grown in that area. Unlike the tobacco industry, where land can be used for other purposes between crops, once an almond orchard is planted the orchardist has to rely solely upon it. He cannot earn a living within a year or so, and unless adequate protection is given to growers until they bring their orchards into full production, the whole of their work will go for nothing. I am credibly informed that the price of almonds practically never varies. Perhaps during the festive season it may increase by a couple of pence per lb., but not to such a degree as to affect the general cost of living. That needs to be taken into consideration. I also stress the fact that when the growers’ representative gave evidence before the Tariff Board he really did not understand the position.

Mr Gullett:

– He was the general secretary of the association.

Mr CAMERON:

– He has admitted frankly that he did not know exactly what was required of him. Now he is in a position to review the matter comprehensively and effectively. With a view to having the Government take further action in the matter, I move -

That the item be postponed.

I should like the duty either restored to the level introduced by the Scullin Government, or at least made adequate to tide over growers between now and the time when they will be able to supply the Australian market.

Dr EARLE PAGE:
Cowper

.- I am anxious that the tariff that we are modelling shall have some pretensions to the term “ scientific.” The honorable member for Darling (Mr. Blakeley) said that he did not know what a scientific tariff was. I am satisfied that such items as this are unscientific. I understand that it takes from 2½ to 3lb. of unshelled almonds to produce 1lb. of kernels. The duty proposed by the Government is 4d., 4d., and 6d., on both kernels and unshelled almonds. It is obvious that, if the duty on unshelled almonds is right, that on kernels is wrong, and vice versa. As a commencement in his costs reduction campaign, the Minister should avoid similarity of duties on dissimilar articles. Before we vote on the amendment we should know the reason why the Tariff Board recommended the duties embodied in the schedule.

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

– I have gathered from the attitude of the Leader of the Country party (Dr. Earle Page) during this debate that a tariff is not scientific unless it represents complete prohibition on all lines in which he is interested. There is nothing in the point that has just been raised by him. It is true that there is a wide difference between the value of almonds in the shell, and that of almond kernels. This is an instance in which the Tariff Board has been extraordinarily generous to the South Australian industry by recommending an almost prohibitive duty on almonds in shells. It has refused to make a similar recommendation in respect of kernels, because South Australia is able to supply only 25 per cent. of the kernel requirements of Australia. It is perfectly obvious that if the board allowed great quantities of cheap kernels to come into the country that would destroy the Australian market for the South Australian grower, and also displace his market for almonds in the shells, I challenge the contention of the Deputy Leader of the Opposition (Mr. Forde) and the honorable member for Barker (Mr. Cameron), that whatever the price charged for almonds, it does not materially increase the general cost of living or of production. The cost of living and production in Australia has not been raised to the highest point - to the penalty of all industries, and particularly of primary export industries - by only one or two stages; it has been built up by the accumulation of hundreds of unit increases, brought about in the sloppy sentimental way now proposed in connexion with the item with which we are dealing. Unless we are vigilant all along the line in connexion with these unit increases we may as well give up immediately any attempt to reduce costs in Australia. Those costs cannot be brought down by half a dozen or twenty major reductions. We must be painstaking and patient, and make little sacrifices even when our own interests are concerned. If we pursue that policy throughout the revision of the tariff, we shall, in the aggregate, make a notable contribution to the reduction of costs in Australia.

The Deputy Leader of the Opposition said that nobody in Australia would suf- fer if no almonds were imported. That is characteristic of the statements that were made by the honorable gentleman during the tariff debate last year. There is a demand in this country for a given and a substantial quantity of almonds, which are largely needed in the domestic sphere, as well as in our great confectionery industry, which has an output of some £7,000,000 to £8,000,000 per annum. The honorable gentleman favours an embargo against almonds, and says that we could carry on in Australia with the 25 per cent, proportion available, using peanuts and other substitutes where necessary. It is because of action based on that sort of reasoning when the Minister for Trade and Customs that our tariff is in its present appalling mess. Almond kernels have to be brought to Australia from half way across the world, bearing the cost of freight, 25 per cent, exchange, 10 per cent, primage, and a duty of 6d. per lb. Yet it is claimed that this hardy orchard product cannot compete with the imported article unless a higher protection is granted. I hope that we shall not continue to hear, on item after item, that this little unit addition of costs means nothing. If we do not carefully review each unit, we shall achieve nothing at all.

Sitting suspended from 6.15 to 8 p.m.

Mr GABB:
Angas

– I have pleasure in supporting the proposal of the honorable member for Barker (Mr. Cameron) that the consideration of the item be postponed. If his amendment is agreed to, I hope that the Government will take the decision as an indication that the committee desires that the old general rate of 9d. per lb. on kernels should be restored. I agree with the Leader of the Country party (Dr. Earle Page) that the new rates have not been adjusted on a scientific basis. The Tariff Board, in its report, recommended such duties on almonds in the shell as would lead to the local demand being overtaken by an increased production of almonds in Australia. That position has nowbeen reached ; tho growers have been able to meet the demands of the consumers for almonds in the shell. The Minister will not deny that the Tariff Board recommended that the growers should be given an opportunity to do that ; but, hav ing adopted the board’s recommendation with regard to almonds in the shell, and that trade having been captured by the local growers, he now brings down a schedule providing for a reduction of the duty on kernels, knowing full well that the trade in kernels must come into competition with the trade in unshelled almonds. One lb. of Brandis unshelled almonds costs ls., and 3 lb. of this variety is required to make a pound of kernels ; but under the new duties Sicilian kernels can be landed at the warehouse dc/or at la. 9d. per lb. I defy the Minister to prove that his proposal is scientific. The object should be to build up the local trade in almonds in the shell, but the reduction of the duty must result in destroying that trade. I was taught at school that science was systematized knowledge ; yet a distinct lack of knowledge seems to have been displayed in the framing of these duties. The Scullin Government’s duties on almonds were nearer to being scientific, because the general rate was 6d. on almonds in the shell, and 9d. on kernels.

I join issue with the Minister in claiming that he has been guided in his action by the Tariff Board’s report ; he certainly followed the letter of the board’s recommendation, but I remind him of the scriptural saying that, “ the letter killeth, but the spirit giveth life.” The Government, in taking no notice of the spirit of the board’s recommendation is likely to kill the almond-growing industry in South Australia. In order to appreciate the spirit of the report, one should read it thoroughly. I shall quote from the report, and I hope that I shall show that one of the things farthest from the minds of the members of the board was the desire to build up the trade in unshelled almonds, but not the trade in kernels. The board took some evidence on this matter in December, 1929, and its Adelaide evidence was heard in March, 1930, so the report is fully two years old. The board was not then prepared to give the duty of ls. per lb. asked for on kernels. It properly claimed that the almondgrowers in South Australia were then unable fully to meet the demand for kernels. The report states, “ The Board does not favour any increase at this juncture in the existing duty on almond kernels.” I hope the Minister will not let the words “ at this juncture “ escape his notice. The report goes on -

Itis considered that by increasing their yield by adopting efficient cultural practices, and by effective organization, the local growers, should, in the course of a few years, be in a position to meet the whole of the Australian requirements, and should materially lessen the cost of production. When the industry has reached this stage, the position as to the duties tinder the customs tariff might be reviewed with advantage.

I read into that statement an intention on the part of the board to encourage one side of the industry first, with the object of enabling it to capture the local trade in kernels; but the Minister has adopted the opposite course.

The industry has made a certain amount of progress. In South Australia, about 1,500 acres have been planted with almonds during the last two years, and under the previous duties the growers would have been quite prepared to plant a further 1,500 acres, with the object ultimately of supplying all the almonds required in this country. The Minister said that the manufacturers of confectionery told the Government that they were willing that the 10 per cent. duty on imported confectionery should be removed, and they favoured the removal of a portion of the duty on almond kernels. In effect, the manufacturers said to the Government - “ We are prepared to do away with 10 per cent. of the duty against imported confectionery, if you will relieve us of an impost of 33 per cent., and place it on the growers.” The big manufacturers seem to have had all the pull with the Government, and the interests of the growers have, apparently, been sacrificed.

Mr Thompson:

– The same thing occurred with regard to tobacco.

Mr GABB:

– That thought occurred to me also. In both instances, the advantage has been given to the manufacturer, and not to the primary producer. The Minister said something concerning the cost of living; but surely nobody will claim that a reduction of the duty on almond kernels could have much effect on the cost of living in an ordinary household, unless some of its members suffered from diabetes, and required almond bread. I want more convincing evidence than is furnished by the present tariff schedule,if I am to believe that the present Government is sincerely anxious to bring down the cost of commodities in this country. Presumably, the Minister remembered his election promise to revise the tariff, and he thought that he would have to show that he was attempting to carry out that undertaking, so he picked out the items dealt with in the reports of the Tariff Board which the Scullin Government had disregarded, such as those dealing with marble, tobacco and almonds. He appears to have hurriedly brought down a schedule based on reports a couple of years old. I stand for a downward revision of the tariff.

Mr Watkins:

– Why not be consistent ?

Mr GABB:

– I am endeavouring to be so, but the Minister is consistent only in his inconsistency. He has misinterpreted the spirit of the Tariff Board’s report in this regard. The report states -

There are considerable importations of almonds in the shell. The average importations during the last few years have been 133 tons per annum.

For the last two years the imports have been less than 10 tons. This report is out of date. The Minister should obtain later information, and act in accordance with it.

Mr PRICE:
Boothby

.- Although because of favorable climatic conditions four-fifths of the almonds produced in Australia are grown in South Australia, I remind honorable members that these nuts could be profitably grown in other States also. Most of the private gardens on the Adelaide plains contain almond trees, which are used as a breakwind, but yield sufficient to pay the rates and taxes on the properties. Several years ago I purchased a property near Adelaide, and planted almonds on it, and the crop has paid the rates and taxes to date. Many other people, however, are getting a livelihood from this crop, and I ask the committee to help them to continue their industry. In South Australia 1,500 acres is planted with almonds. Mr. Gunn, of the development branch of the Prime Minister’s Department, investigated the industry, and recommended the planting of a further 1,500 acres as soon as possible. That is about to be done, and we ask that those growers who have acted on this recommendation be not penalized. Almond trees do not reach full bearing until their sixth or seventh year. The former duties on kernels were - 6d. per lb. British and intermediate, and 9d. general. The Minister has proposed that these rates be reduced to 4d. British and intermediate, and 6d. general. The report upon which he acted is two years old, and its facts are out of date. I support the amendment of the honorable member for Barker (Mr. Cameron) to defer the item so that it may be referred back to the Tariff Board.

Question - That the item be postponed (Mr. Cameron’s amendment) - put. The committee divided. (Chairman - Mr. Bell.)

AYES: 32

NOES: 24

Majority .. 8

AYES

NOES

Question so resolved in the affirmative.

Item postponed.

Item 105-

By omitting the whole of the sub-item (G) and inserting in its stead the following subitem: - “ (G) Hair cloth and Cloth of Hair in com bination with other fibres for interlining apparel, per square yard, British, 6d; intermediate, 7d.; general, 8d.; or ad val., British, 45 per cent.; intermediate, 55 per cent. ; general, 00 per cent., whichever rata returns the higher duty.”

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

.- This item deals with hair cloth, and it is proposed to reduce the duties introduced by the Scullin Government. The old duties were1s. 3d. a square yard, British, and 2s. 6d. foreign. These were amended during the tariff debate last year to . 9d. a square yard British, and1s. 6d. general, and 25 per cent. and 50 per cent. I confidently ask the committee to accept the proposed reductions, which are in accordance with the recommendation embodied in one of the most emphatic Tariff Board reports that has ever come before the House. The alternative rates I am now proposing are, it is true, substantially lower than the old cumulative rates. But an examination of this industry suggests that its establishment in Australia was premature. There would be no market in this country for the products of the industry if it were conducted on an economic basis. The industry should not have been begun here until the market was much larger than it is to-day, or is likely to be for many years to come. In proposing that the committee should adopt the recommendations of the Tariff Board, I am guided mainly by the following facts: (1) The commercial manufacture of a large variety of both the better grades and lower grades of hair cloth is not economically possible of attainment; (2) the total market in normal times approximates only £80,000 a year ; (3) the necessity for the importation from overseas of over 50 per cent. by value of the raw materials used in the manufacture of hair cloth. The imported raw material consists of mohair and goat-hair yarn, and combination yarns consisting of wool, horsehair, goathair and cotton. All these are admitted free from the United Kingdom under departmental by-law, and at a concession rate of 4 per cent. primage duty. It is evident, therefore, that every attempt has been made to assist the industry.

Some extraordinary facts are disclosed in the Tariff Board’s report. It is revealed that the direct labour costs in the industry represent only 12J per cent, of the factory selling price, so that the industry cannot be said to provide any substantial market for Australian raw material, or any great volume of employment in proportion to the value of its product. The expensive and lower grades of cloth cannot be economically manufactured in Australia. A remarkable fact is that the flat rate of 6d. a square yard duty recommended by the board is sufficient to cover the following production costs: It pays wages, covers all factory overhead costs, pays for fuel, pays for stores, and pays for repairs and maintenance of machinery. Yet we are told that, if the old duties arc not restored, this factory will have to close down immediately. Is there a man in Australia with any business knowledge who could not, within five minutes, write down the names of twenty new industries which could begin operations profitably on those terms? The protection granted to this industry constitutes an utterly hopeless attempt at tariff making. I propose, with great reluctance, the acceptance of the new rates of duty. The industry is actually in operation, the capital has been invested, and labour is being employed. I aru loth to see this factory closed, and the capital lost, and I am particularly reluctant to see workers thrown out of employment.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– How many persons are employed?

Mr GULLETT:

– About 100, I think. T almost apologize to the committee for proposing the new duties, but I do so in the hope that, as time goes on, and industrial costs are reduced, the industry may be able to carry on economically.

Mr Hutchin:

– Has it not been stated that the factory will have to close down if the duty is reduced?

Mr GULLETT:

– That has been said, but the same thing is said every time it is proposed to reduce a duty. The Scullin duties on. this item amounted to over 2Q0 per cent, ad valorem, and were greater than the manufacturers’ selling price for many lines. I understand from the speeches that have been made that several members of the Country party are in favour of the retention of the old rates, and are not prepared to accept the Government’s proposals.

Mr Mcnicoll:

– That was not stated.

Mr GULLETT:

– I am glad to hear it. The Tariff Board has gone a long way to assist this industry, and I urge’ the committee to accept its recommendations.

Mr FORDE:
Capricornia

.- The Minister stated that the report of the Tariff Board on this item was the most convincing he had ever read, but I have heard him say the same thing scores of times before. He used to say it every time I, as Minister, proposed an increased duty on an item concerning which the board had reported against an increase. I have read the board’s report on this item, and it certainly indicates that the members have gone into the matter fairly fully. The board, however, can make mistakes.

Mr Gullett:

– It always does, in the honorable member’s opinion.

Mr FORDE:

– Not always; but I regard the board as an advisory body only. The Minister has stated that while he believes in following the recommendations of the Tariff Board, he will not adopt any recommendation which, if given effect, would lead to unemployment. I firmly believe that if this reduction of duty is agreed to it will bring about unemployment. The Minister stated that half of the raw material is imported. One half is wool and the other is mohair. But what about the artificial silk manufacturers, who import the whole of their raw materials? Are they being refused protection on that score?

Mr Gullett:

– They are not faced with duties of this nature.

Mr FORDE:

– They have been given adequate protection. The manufacturer of worsteds has the benefit of a higher rate of duty per yard on material which is essential in a suit just as haircloth is for lapels. The duty on haircloth is being reduced from ls. 3d. and 35 per cent. British, 2s. and 45 per cent, intermediate, and 2s. 6d. and 50 per cent, general, to 6d. or 45 per cent.; 7d. or 55 per cent., and. 8d. or 60 per cent, per square yard respectively.

This subject was referred to the Tariff Board two years ago. The board submitted its report on the 29th April, 1931, but since then conditions have changed considerably. The Amalgamated Textiles Limited established factories at Albury, Goulburn, and Orange in New South Wales. It confines its operations to the country districts. The company has been in active competition with metropolitan firms, and is holding its own. The Goulburn factory is manufacturing haircloth, and giving employment to about 100 persons. The company has acquired a licence to manufacture this cloth by a patented process which gives certain advantages not possessed by similar cloth manufactured under ordinary conditions. This is a new industry in Australia. The value of Australian wool used in the manufacture of haircloth is at present £7,500 per annum, but the production at Goulburn has not yet reached 50 per cent, of normal requirements. Because of the trade depression, and the heavy stocks of imported material in the warehouses, the consumption of the local product has not been normal. Just before the duty was imposed one firm had imported 10,000 yards of haircloth, and another firm about 20,000 yards. Those imports have militated against the sale of the locallymanufactured article. In normal times the consumption will be at least twice what it is at present, and the number of employees and the value of the Australian wool used in the manufacture will consequently be doubled. English and continental manufacturers of haircloth, with the present low prices ruling throughout the world, are offering haircloth at a price that cannot be profitable. Lt is believed that they are dumping their surplus production in Australia. Any advantage that the local company enjoys from the present exchange rate is set off by the disadvantage it suffers in respect of the purchase of its raw materials - wool and mohair. The manufacturer in Bradford pays about 12d. per lb. for tops, which in Melbourne cost 16Jd. There is a similar difference in the cost of the mohair. The haircloth is as much an integral part of a suit as the cloth out of which it is made. The duty on worsteds is 2s. per square yard, or 35 per cent. British; and 3s. per square yard, or 50 per cent, general. The duty under the Scullin schedule on haircloth was only ls. 3d. and 2s. 6d. The manufacturer of Australian worsteds who receives this tariff protection has not been interfered with under the proposals of the Government. Why single out the manufacturer of haircloth for drastic treatment, disorganizing bisbusiness and forcing 100 persons at Goulburn out of employment? The Amalgamated Textiles Limited is employing 600 persons and has 3,000 shareholders. Its capital has been subscribed mainly from New South Wales and Victoria. Its . request is reasonable. It will be satisfied with a duty of 9d. per square yard plus 45 per cent, ad valorem. I shall not move an amendment to that effect, but if the representative of the district of Goulburn sees fit to do so, I shall support him. This firm is under efficient management, and if it obtains the assistance it requires from this Parliament, it will be able to continue its operations. If this reduction of duty is agreed to, it will have a most disastrous effect upon the industry. Why should we throw men and women out of employment at a time like this? The Minister has stated that he would not accept any recommendation of the Tariff Board, which, in his opinion, would tend to throw men out of employment. I take him at his word, and ask him to give the request of the Amalgamated Textiles Limited favorable consideration.

Mr MCNICOLL:
Werriwa

.- I spoke on this subject in the small hours of the morning, but as many honorable members were absent and others somnolent, I shall briefly summarize the remarks which I then made. I am not advocating high tariffs, nor am I proposing that the committee should revert to the Scullin tariff. But I have a few things which I wish to point out to the committee. First of all the Minister stated that the manufacture of haircloth was premature, and that the industry was purely exotic. Then he confessed that it wrung his heart-strings to throw it on the cold world. He said that he took this action with the utmost reluctance. I should like to know what benefit will accrue from his action if he is doing it with so much reluctance. This is a new industry, although the factory in which it has been established is not new. It was built as a woollen mill, and as such did not thrive. The new company which took it over used the plant for the manufacture of haircloth. The Minister says that there is no big market for this material, but surely that is no reason why Australia should not secure whatever market is offering. We have been encouraged to use Australian goods so that Australian industries may be developed. Haircloth is used in the lining of suits and for stiffening lapels. The factory is making various types of haircloth, one type being used for whole suitings for tropical wear. When the industry began, the material was not of the best quality, but now it is of high quality, and some sixteen or eighteen varieties are being made. I have been through the factory and seen the whole process. I know the class of work carried out by the employees and the wages that they receive. It is certainly desirable that we should retain an industry of this kind in Australia, particularly as it is capable of providing the whole of our haircloth requirements. The Tariff Board’s report was made two years ago. The evidence that was given then may not be in agreement with the evidence that is available to-day. I think that a compromise might be effected in respect of these, duties. The Tariff Board is now dealing with woollen piece goods, and the Government might well ask that body to review its recommendation in regard to haircloth and to make a further report on the subject. If that is done, the new evidence, that is available may cause the Tariff Board to make a slight change in its previous recommendation. The establishment’ of these factories in the country districts tends towards decentralization. A number of men and women are given employment. They are skilled operators -spinners and weavers - who would find difficulty in finding other positions. These employees have had a special training, and it would be difficult to replace them. T cannot see what benefit would be obtained by killing this industry. The old duty was ls. 3d. per square yard and an ad valorem duty of 35 per cent. The proposed duty is 6d. per square yard, or an ad valorem duty of 45 per cent.

I feel sure that the Minister for Customs (Mr. Gullett) is sympathetic towards this industry, and I hope that he will allow the Tariff Board to make another inquiry into its circumstances. With that ob-lee in. view, I move -

That the item be postponed.

Mr DEIN:
Lang

.- This is the first time I have participated in the debate on this schedule. I trust that we shall not be asked to suffer another debate of such duration. The Deputy Leader of the Opposition (Mr. Forde) has told us that when he was administering the Customs Department representations were made to him by certain manufacturers in Goulburn for an increased duty on hair cloth. A high duty was immediately imposed. I do not know whether it was fixed by any recognized authority or by the whim of the Minister of the day. We have been told that the Tariff Board’s report on this subject is two years old. Why did not the previous Government give the House an opportunity to discuss it eighteen months ago? The hair cloth industry, like many other small industries, was established during the regime of the Scullin Government, and, apparently, very little attention was given to the prospect of the manufacturers ever being able to market their material on a reasonable basis; The industry was prematurely established. I regret that the unfortunate employers of this company have been put in their present position. It is distressing to think that 100 workers are faced with dismissal. This serves to prove the imperative need for scientific tariff reform. No government or minister should be able, in response to the special pleadings of certain people, to grant high duties. Every industry should’ be considered on its merits. I believe that this Government will see that duties are not granted without adequate investigation. I am in a difficulty in dealing with this item. I feel, on the one hand, that the manufacture of hair cloth is not on a sound basis, but on the other hand there is the welfare of the employees to consider.’ I shall give the employees the benefit of the doubt.

Mr BLAKELEY:
Darling

– I hope that the Government will accept the amendment. During this and previous tariff debates the present Minister for Trade and Customs (Mr. Gullett) .and his colleagues have referred in uncomplimentary terms to what they have termed “ backyard “ industries. Immediately this Government assumed office it made a terrific onslaught upon these industries; but it is extraordinary to me that it should have concentrated particularly upon back country industries.

Mr Nairn:

– There is a good deal in that.

Mr BLAKELEY:

– I know that there is not a brotherly feeling between the present Government and the Country party. I should not care to say that there is an actual feud in existence, but certainly this Government has done a great deal to prevent the development and encouragement of country life. Tariff variations such as we are now considering strike a distinct blow at country interests. The company which will be affected by this alteration of duties is quite different from an ordinary trading enterprise. A few- years ago many honorable members of this Parliament, representing all the parties in the House, toured the’ country and urgently appealed to people with money to set up industries which could be carried on in country districts. Many people in New South Wales responded patriotically to that appeal, among whom were the 3,000 people who invested money in this company which established woollen mills at Orange, Goulburn and Albury. I do not know what the capital of the company is, but I know that it has provided employment for 600 people, 100 of whom are engaged in the manufacture of haircloth. The company, so far as I know, has not had any return from its investments, but it is willing to carry on in the hope that ultimately it will turn the corner. A company which had the courage to establish an industry in a place comparatively remote from sources of power for the special purpose of providing employment for country people should be encouraged. The sum of £150,000 was spent in establishing the Goulburn factory, and I suppose a somewhat similar amount was spent in both Albury and Orange. The company accepted the assurance of succeeding governments that it would be granted adequate protection. It entered upon what some people regarded as a dangerous experiment when it established its factories away from the metropolitan area, but its business is now on a solid basis. We have encouraged the manufacture of textiles for suitings and other purposes and it seems only reasonable that we should encourage the manufacture of haircloth which is required for making suits.

Mr Nairn:

– If this item is agreed to there will still be a protective duty of 75 per cent, in respect of haircloth.

Mr BLAKELEY:

– The Deputy Leader of the Opposition and other honorable members have, on various occasions, referred to the methods adopted by overseas organizations to crush newly established Australian industries. These interests contribute to a central fund for the purpose of enabling unfair competition to be waged against new industries in Australia. Those who indulge in these commercially objectionable practices are quite prepared to lose all the money they put into such a scheme if they think that by so doing they can kill the infant industry at which they are aiming. It is necessary, therefore, that newly established enterprises should be protected from such industrial vendettas. This company is prepared to take the risk of maintaining and even doubling the amount of employment it gives, for it hopes that with adequate protection it will be able to make a success of the industry.

Mr Nairn:

– And double the cost of haircloth to the people!

Mr BLAKELEY:

– I remind the honorable gentleman that on not one occasion during the two and a half years that the Deputy Leader of the Opposition was in charge of the Customs Department did any firm which undertook not to increase the price of its commodity break its undertaking.

Mr Archdale Parkhill:

– We should be guided by what the Tariff Board says.

Mr BLAKELEY:

– The Minister for the Interior (Mr. Parkhill) was one of those who, to oppose the tariff policy of the Scullin Government, indulged in foolish fantasies, spoke of backyard and pampered industries, and generally made so many stupid declarations that he feels that he must continue the extraordinary campaign that he began, which has made him ridiculous in the eyes of all who know the facts. The honorable gentleman is constantly mouthing his alleged desire to help the workers and obtain employment for them. He knows that if the proposals of the Government are carried into effect in this case 100 men will be thrown out of work.

Mr Hutchin:

– One hundred men would not be engaged in an industry of this nature. The honorable gentleman surely means 100 persons.

Mr BLAKELEY:

– Let it be 100 persons. If the displacement of 100 employees is the Government’s method of reducing costs, I should like to know how that policy is going to help the unemployed. It is a tragedy that the Government should deliberately set out to cripple a promising young industry.

Mr ARCHDALE PARKHILL:
Minister for the Interior · Warringah · UAP

– The location of an industry has very little to do with the merits of the case. Either a duty is justifiable or it is not. I propose to give some facts on the subject, as opposed to the “meanderings of Monty “ in which the last speaker indulged.

Mr Blakeley:

– I object to the offensive remarks of the Minister, and ask that they be withdrawn.

Mr ARCHDALE PARKHILL:

– I submit that I have used a description which can legitimately be employed in parliamentary debates. It aptly describes the utterances of a mythical person who adopted an attitude similar in every way to that of the honorable member for Darling (Mr. Blakeley).

The CHAIRMAN (Mr. Bell).Order ! The way in which the Minister has amplified his definition makes it clear that his remark was disorderly. He must withdraw it.

Mr ARCHDALE PARKHILL:

– I withdraw it. Not. one fact was adduced in the speech of the honorable member for Darling. He spoke about 100 men being thrown- out of work and, when challenged, substituted 100 persons. Where he obtained his information about the 100 persons, no one seems to know. Apparently, it is a figment of his imagination, or a morsel picked up from the Deputy Leader of the Opposition (Mr. Forde) ; an “ ask my brother if I am a liar “ sort of thing. Well might the manufacturer, in whose interest the honorable gentleman spoke, ask to be saved from his friends. The facts, of the case are to be found in the report of the Tariff Board, an impartial tribunal, which has no desire to mislead anybody. That body sifts the evidence which is presented to it, and then makes its recommendation. The Tariff Board says that this is an entirely uneconomic industry which should not have been, established.

Mr Hutchin:

– If that is so, is it noi logical to assume that all protection should be removed from it?

Mr ARCHDALE PARKHILL:

– No. The argument has been freely used in this chamber that once an industry has been started and people have invested money in it, wisely or unwisely, it is the duty of Parliament and the public purse to see that the investors obtain interest on their money. With that 1 entirely disagree.

Mr Scullin:

– What does the honorable gentleman me’an by “ the public purse ?”

Mr. ARCHDALE PARKHILL.Any tariff concession may be deemed a charge on the common people of the country that the right honorable gentleman pretends to represent, and whom he subjected to these excessive charges.

The CHAIRMAN:

– Order!

Mr Scullin:

– The Government cannot expect to get this debate through expeditiously if its Ministers employ such tactics.

The CHAIRMAN:

– Order! I do not intend to permit this running fire of interjections across the table to continue. The Minister must address ‘ the Chair.

Mr Blakeley:

– He might also explain what he means by “ the common people “.

The CHAIRMAN:

– Order!

Mr ARCHDALE PARKHILL:

– 3 apologize if I have disregarded your ruling, Mr. Chairman, but I draw attention to the fact that the Leader of the Opposition (Mr. Scullin) leaned across the table and, in a most offensive manner, directed a tirade of abuse at me.

Mr Scullin:

– I definitely deny that 3 uttered a tirade of abuse against the Minister. I asked a reasonable question, what the honorable gentleman meant by “ the public purse”. I can give only one definition to that expression, which leaves the implication that something is being paid out of the public purse to these manufacturers. In reply to my question I was abused.

The CHAIRMAN:

– The Minister will address his remarks to the amendment.

Mr ARCHDALE PARKHILL:

– Merely because an industry has been established in Australia, those concerned have no right to come to Parliament and ask for financial consideration, because that is what a tariff concession amounts to, so that they may receive interest on their investment, irrespective of whether the industry is carried on efficiently or inefficiently. We are told that this industry employs 100 persons. The report of the Tariff Board says that the direct labour costs represent only 12½ per cent. of the factory selling price, and that the fixed rate of 6d. per square yard covers all costs, including wages, factory overheads, fuel, stores, repairs and maintenance. In the circumstances the claim that the industry will have to close its doors if the proposed duty becomes operative, is not borne out. If carried on efficiently it should be able to meet competition. The public as well as the manufacturer and employee is entitled to some consideration. The report of the Tariff Board reads -

After a thorough examination of an extensive range of quotations and samples, the board is convinced that if the goods previously imported are made in Australia the average costs of these goods to users would, under the proposed duties, exceed the previous average cost by at least 50 per cent. In some instances the excess cost would appear to be no more than 40 per cent., but it is much greater in the case of many of the big selling lines.

It has been pointed out that since the report was made costs have come down considerably. The Tariff Board says that the proposed duty is fair and reasonable, having regard to all the facts. It points out that the amount of labour engaged is only 12½ per cent. ; that the duties offered cover all the wages and other charges that I have mentioned; and that, if the duties asked for were granted, the public would be required to pay 50 per cent. more than should be paid for this commodity. I submit that the Government’s attitude is entirely justifiable. I do not suggest that honorable members who have voted in the past for duties amounting to 600 per cent., and even 1,000 per cent., will be satisfied with the proposal of the Government, but I submit that it is fair both to the manufacturers and to the general public.

Mr HOLLOWAY:
Melbourne Ports

– I have the greatest confidence in the members of the Tariff Board and all the officers of the department. I believe that if they were asked to review this case they would gladly do so, and would probably arrive at a slightly different decision. The cost of the haircloth used in a suit of clothes ranges from1s. to1s. 6d.; but what I am concerned about is the fact that the present Government and the last Government have repeatedly called upon private enterprise to assist in coping with the unemployment problem; yet, when we find enterprising groups of private employers anxious to assist in providing employment, all kinds of objections are raised. I do not suggest that the whole of the duty imposed by the previous Government is necessary to enable this branch of industry to prosper ; the manufacture of haircloth is but an auxiliary branch of a larger industry. The company that has been supplying this material now produces woollens, suitable for the manufacture of clothing, which for quality cannot be excelled in any part of the world. So far as I can gather there is only one penny per square yard in dispute in determining whether the haircloth industry shall continue or go out of existence.

I agree with the statement of the honorable member for Darling (Mr. Blakeley) that when new competitors come into the field, an effort is likely to be made by those already in the industry temporarily to undersell them, in order to keep them off the market. It will be agreed, I think, that the company chiefly concerned about this duty has demonstrated that it can make haircloth equal to the imported article. The Tariff Board, presumably, has no doubt that 100 persons are engaged in this subsidiary industry, and if that is so, the Government should at least be prepared to have the duty reviewed. I am convinced that some alteration would then be made to the company’s advantage. The value of the haircloth used in the manufacture of a suit of clothing being less than 2s., the duty could not add more than a few pence to the cost of clothing to the consumer. We are dealing with a branch of what will be a complete textile industry, and it would be of advantage to the general community to enable it to continue all its present activities. The granting of a duty of an additional1d. per square yard would enable the company’s prices to hold against the reduced charges of its competitors, who have temporarily lowered their price in order to keep the local manufacturer off the market. If the Tariff Board reviewed the matter in the light of the experience of the last two years, some slight additional relief could be given to the industry.

Mr COLLINS:
Hume

.- I have pleasure in supporting the amendment. I am sure that the Minister for Trade and Customs (Mr. Gullett) would be reluctant to see 100 persons now engaged in the mills at Goulburn thrown out of employment. The manufacture of haircloth is one of the activities of the Woollen Textiles Company, which also has works at Albury and Orange. I have had the pleasure of visiting the mills at Albury, where from 250 to 300 persons are employed. The manager came from Bradford, and he assured me that these mills were among the most complete in the world. If there were a shearing shed at one end and a tailoring shop at the other, the raw material from the sheep’s back could be taken in at one end of the works, and the finished product, in the form of men’s clothing, could be supplied at the other end. We should encourage the establishment of large industries in the inland portions of Australia, because they are of invaluable assistance in promoting decentralization. I happen to be wearing a suit of clothes made from the product of the Albury mills, and the quality of the material has been favorably commented upon by several honorable members. The Minister for the Interior (Mr. Parkhill) will agree with me that it is highly desirable to encourage those industries which open up avenues of employment for the residents in inland districts.Although the mills at Albury are not yet showing a substantial profit, if any at all, because of the difference between the conditions of employment in Victoria and New South Wales, when uniform rates of wages and hours of employment are observed throughout the Commonwealth, the industry should become one of which the people of Australia may justly feel proud. I hope that the committee will allow this matter to be sent back to the Tariff Board for further consideration.

Mr THORBY:
Calare

.- I was disappointed when I heard the Minister for the Interior (Mr. Parkhill) practically question the right of members of the committee to comment adversely on a report of the Tariff Board. I contend that the board is merely an agent of this Parliament for the prosecution of inquiries on behalf of honorable members. It is our duty to give careful consideration to the reports of the board, and to decide whether they should be adopted or rejected, or whether further inquiries should be made. I do not agree that the present duty on haircloth is satisfactory. I understand that the board, whose report is over twelve months old, agreed to the duties originally imposed, which gave a protective duty of1s. 3d. per yard, plus 35 per cent. ad valorem; but the board now recommends that that duty should be reduced to 6d. per yard, or 45 per cent. ad valorem.

Mr Gullett:

– The board at no time recommended a duty of1s. 3d. a square yard. That was due to the arbitrary action of the honorable member for Capricornia (Mr.Forde) when Minister.

Mr THORBY:

– At any rate, the industry was granted a protection of1s. 3d. a square yard, plus an ad valorem duty of 35 per cent. Certain people were thereby encouraged to invest large sum? of money in the industry, which now employs 95 persons, and although working only half time, produces £750 worth of haircloth, and pays £190 in wages weekly. I am informed that if the Tariff Board’s recommendation be adopted by this committee the industry will be closed down.

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Will a reduction of1d. per square yard mean the closing of the factory?

Mr THORBY:

– The reduction proposed is 9d. per square yard, plus the removal of the 35 per cent. ad valorem duty.

Mr Lane:

– The article is not worth more than about 2s. a yard.

Mr THORBY:

– I am not concerned with the value of the article, nor is the committee entitled to take that into consideration. This item was referred to the Tariff Board by the Minister for Trade and Customs in May, 1930, and the report is dated the 29th April, 1931. I do not express any opinion on the duty which the Minister is proposing, but I support the amendment to refer the item back to the Tariff Board for further consideration. I undertake, if the board confirms its former report, to strongly support the item when it is again before us. My colleagues of the Country party would probably give a similar undertaking. I do not ask for unreasonable protection for any industry or group of persons. The Minister for the Interior (Mr. Parkhill) said that the location of an industry has nothing to do with the merits of its claim for protection. I submit that location is a factor of tremendous importance.

Mr Archdale Parkhill:

– If this industry were in Botany the honorable member would oppose any increase of protection for it.

Mr THORBY:

– I resent that statement, although I believe that a government would be justified in subsidizing industries, if necessary, to remove people from congested industrial suburbs into the country. It should be the desire of honorable members to establish as many manufactories in the rural areas as can reasonably.be done. The location of this industry strengthens my appeal to the Minister to have the item reviewed by the Tariff Board. I have no desire to embarrass the Government, and I assure the Minister that this is not a party matter.

Mr GULLETT:
Minister for Trade and Customs · Henty · UAP

– Honorable members seem to have some doubt regarding the history of this duty, and I propose to relate briefly the facts, because they emphasize the extraordinary method of tariff making adopted by my predecessor. This item was first introduced to Parliament by the honorable member for Capricornia (Mr. Forde) at the following rates: - British, ls. 3d. per square yard; and general, 2s. 6d. per square yard, plus substantial ad valorem rates.

Mr Forde:

– Those duties were proposed only after careful investigation by the department.

Mr GULLETT:

– I am acting upon a report which is not the. result of a careful investigation by the Minister, but is the considered opinion of a properly appointed, expert, and impartial Tariff Board.

Mr Scullin:

– My colleague spoke of a careful investigation by the department, not by himself.

Mr GULLETT:

– That amounted to the same thing in the honorable gentleman’s case. The origin of many of his tariff proposals is a complete mystery.

Mr Forde:

– Like the honorable member’s tobacco combine ramp !

Mr GULLETT:

– I am not imputing to the ex-Minister anything unworthy. These duties were proposed by him, but Parliament was never told how they originated. The value of the careful investigation to which he has referred is revealed by the fact, that at his next attempt to protect this industry he reduced the British preferential duty from ls. 3d. to 9d., and the general duty of 2s. 6d. to ls. 6d. Now the .Tariff Board declares that a duty of 6d. per square yard is sufficient to pay wages, factory overhead, fuel, repairs, and maintenance. That illustrates the irresponsible method of tariff making adopted by the honorable member. I appreciate the conciliatory tone and reasonable nature of the speeches of some honorable members, but I remind the members of the Country party that they have been clamouring for tariff revision, and have almost abused me for my tardiness in proposing an all-round reduction of duties. The item now before the committee is not the result of arbitrary ministerial action. The Tariff Board’s report was before me, and because it could not be passed by without destroying the prestige of that body in the minds of industrialists, the public and Parliament, action was taken upon it. The honorable member for Calare (Mr. Thorby) has suggested that this item should be postponed, so that it may be again referred to the Tariff Board. The Government is not prepared to accept that proposal, but if the committee will pass the item in its present form - that is not asking much, having regard to the recommendation on which it is based - I shall immediately refer the matter again to the Tariff Board, w7ith a request that it shall expedite its inquiry, and I undertake to act upon ‘ its recommendation at the earliest opportunity. I am just as reluctant as are other honorable members to throw 100 employees out of work, and for that reason I make this definite offer to the committee.

The overwhelming majority of the people are looking to this Parliament for tariff, revision. They are not expecting drastic action upon the initiative of a Minister or by mere vote of the House, but they are expecting, as they have seldom before expected anything in politics, progressive and scientific tariff revision. Honorable members have criticized me on account of the modesty of this schedule and the caution with which I have commenced the revision of the tariff. I have done all that I could do within the Government’s declared policy of acting upon the advice of the Tariff Board. I have taken action on all its reports of recent date that were available to me.

A very serious position will arise regarding tariff revision if the Government’s proposals are persistently held up because they cut across the political interests of various honorable members. Tariff revision becomes pretty hopeless if the Government cannot rely upon the support of the House for proposals based on the recommendations of an impartial authority. If members of the Country party are looking for tariff revision, they must be prepared to give better support to the Government than we have had tonight; otherwise I can assure them the Government will not be in any great hurry to revise the tariff.

Mr SCULLIN:
Yarra

.- The speech of the Minister included insinuations against the ex-Minister for Trade and Customs (Mr. Forde), and this is not the first time he has indulged in such practices. He referred to “ mysterious “ methods.

Mr Gullett:

– I made no insinuations against the integrity of the ex-Minister.

Mr SCULLIN:

– I accept the Minister’s assurance, but I have not forgotten that the Minister for the Interior (Mr. Parkhill) once made a definite charge that the high duties on imported galvanized iron had been imposed by the Scullin Government because one of its Ministers was interested, in the sale of iron manufactured by Lysaght Limited. The present Government now proposes to retain those duties, but there is no suggestion that it is being done because some member of the Ministry is interested in. the industry.

The Minister for the Interior said that the location of the industry affected by the item under discussion ought not to affect the merits of the case. I disagree with that, and in this respect find myself in agreement with the honorable member for Calare (Mr. Thorby). When we are considering protection for Australian industry, we keep in mind the disadvantages under which industry carries on in Australia as compared with other parts of the world, and protection is granted accordingly. By the same reasoning, if it can be shown that an industry in a country town suffers as a result of its location, compared with city industries, we should be prepared to grant it a special concession. While the honorable member for Calare was speaking, the gibe was thrown out by one honorable member opposite that if the haircloth manufacturing industry was established in Botany, he would oppose protection for it. Well, I am not a country representative ; I represent one of the most congested areas in Australia, an area in which there are probably more factories to the square mile than in any other part, and I should’ be prepared to give more encouragement to a secondary industry in the country than to one in the city. I know the evils of congestion, and the harm that is done by crowding people together on small allotments of high-priced land. An industry which uses our wool is a natural country industry, and I should like to see tens of thousands of people working in factories in country towns where they will have room to move, and fresh air to breathe. An industry set up in Goulburn, Wagga, or Albury, is at a disadvantage compared with industries in the city, because it has to pay freights; and its market is not alongside. It is all very well to say that, in those circumstances, it is not efficient; but we can make a fetish of efficiency. I believe in efficiency; but there is something we should consider first, and that is humanity. I wish to see the population of Australia distributed over the whole country, and not crowded together in the capital cities; and I should be prepared to grant some concession to induce people to establish industries in country towns.

I resent the assertion of the Minister for Trade and Customs that the Deputy Leader of the Opposition, when he was Minister for Trade and Customs, in some mysterious way evolved new duties, and imposed them by his arbitrary act. In one sense, of course, every ministerial act is arbitrary; but there was no mystery about the way in which the ex-Minister for Trade and Customs arrived at his conclusions regarding duties. It was done by hard work and careful investigation. I worked alongside him in many of his investigations; I saw the files with which he dealt, and I know the painstaking care which he devoted to his task. I also had an opportunity of observing the work done by the officers of his department, than whom there are no more capable men in the Service. I should be prepared to pay as much respect to the reports and recommendations of departmental officers as to those of the Tariff Board. I agree with the statement of the honorable member for Calare that the Tariff Board was never intended to have the last word on tariff matters. Its duty is to examine facts, and to report to Parliament, and, in doing that, it is accomplishing a useful work. Its recommendations are based on the opinions of its members, formed after hearing evidence, but the most we can say is that the recommendations represent their opinions. Surely the Minister for Trade and Customs, and this Parliament, have a right to examine those recommendations, and should not be required to accept them slavishly. 1 rather think that the honorable member for Calare spoiled his case when he gave an undertaking that, if the Tariff Board again made a certain recommendation after the matter had been referred back to it, he would accent that recommendation. I remind honorable members that this Parliament is the only body which has authority to make tariff laws. Apparently, the Minister’s method of revising the tariff is to throw the whole responsibility on the Tariff Board. If we are to accept that policy we might as well close down Parliament altogether. The Minister for Trade and Customs was a member of the Government which appointed scores of boards and commissions, on which it placed responsibility that it should have borne itself.

Mr Nairn:

– Parliament cannot frame a tariff schedule.

Mr SCULLIN:

– Parliament can review a tariff schedule, and take responsibility for effecting alterations. Some honorable members appear to have an inferiority complex, in that they are not prepared to accept any responsibility. The Minister stated that the people were looking for a revision of the tariff. What a delightful word is “ revision “ ; how it deceived the electors ! Honorable members opposite did not tell the people that their idea of revising the tariff was to cut down the measure of protection for Australian industry. I ask the Minister for Trade and Customs to recall the deputation sent from the manufacturers in Melbourne, and the eleventh-hour proposition put forward to secure votes before the last election.

I know of very few industries which responded to protection as quickly as this one we are now considering. A short time ago the honorable member for Wentworth (Mr. E. J. Harrison) asked by way of interjection what the Australian manufacturers had done in response to the tariff protection that had been afforded them. Had they, he asked, provided increased employment? He must admit, surely, that the haircloth industry responded quickly enough. One honorable member even complained that no sooner had theduty been imposed than bricks were bought, and a factory built for the manufacture of haircloth. He spoke as if it were a crime to show such haste, but, at any rate, it showed that those responsible were anxious to take advantage of the protection afforded, and to provide employment.

Mr Parkhill:

– I desire to make a personal explanation. The Leader of the Opposition (Mr. Scullin) dragged into this discussion a reference to galvanized iron, a subject which is not before’ the committee at the moment. He stated that I had made a dirty insinuation against a member of his Government. I made certain statements on the floor of the House, and on two occasions I justified those statements. The remark of the Leader of the Opposition was as contemptible as the position he occupies in the public life of this country.

The CHAIRMAN (Mr Bell:

– Order ! The Minister must withdraw that statement, and apologize to the Chair. The Chair is entitled to expect the support of Ministers in preserving order in committee.

Mr Archdale Parkhill:

– I withdraw the statement, and apologize.

Mr WHITE:
Balaclava

– The fierce eloquence of the Leader of the Opposition (Mr. Scullin) leaves me cold. We are all familiar with his style. We understand from his remarks that he supports the decentralization of industry, and is prepared to grant protection to industries even though they may be situated in the country. He favours a high duty on haircloth, but was there ever a proposal for an increased duty, no matter how high or prohibitive, that he did not support? He and his party are advocates of prohibition, instead of sane and selective protection, as are honorable members on this side of the House. I have been struck by the paradox that, although the Country party claims that the man on the land is exploited by high tariffs, we have been, for. the last two days and nearly two nights, discussing three proposed reductions in duty, every one of which has been opposed by the Country party. The members of the Country party, like a minstrel troupe, rise one after the other to speak on the tariff items. Some of them make .two speeches whether the subject is tobacco, almonds or anything else. They are taking every opportunity to speak on this item which relates . to the haircloth industry. The members of the Country party in advocating increased duties on those items undoubtedly believe that they stand for country interests, but would they show the same enthusiasm for increased duties in respect of secondary industries in Melbourne or Sydney! I think not. Would any honorable member hazard what would be a correct duty for the protection of the haircloth industry at Goulburn ? We have had long speeches from the Leader of the Opposition (Mr. Scullin) and the Deputy Leader of the Opposition (Mr. Forde), but they have submitted no figures whatever. Tariff making is largely a matter of figures. The Minister has told us that the previous duty of ls. 3d. per square yard plus an ad valorem duty of 35 per cent., which gave a protection of about 200 per cent, was fixed, not by the Tariff Board, but as a result of some inquiry off stage. The Tariff Board has since inquired into the position of this industry. I have no doubt that it appreciates as well as we do the necessity for encouraging industries and country industries especially, to assist in the development of Australia. It no doubt took into consideration the location of this factory and the fact that it had, to a small degree, brought .about decentralization. The board in its wisdom has recommended a duty of 45 per cent, ad valorem. That duty is based on the home consumption price plus 10 per cent., which makes it actually 50 per cent. We must add to that a primage duty of 10 per cent, which is a revenue duty; shipping and buying charges, about 10 per cent.; a packing case duty of 30 per cent., which on the value of the goods may work out at 3 per cent, ; and exchange which at present is pegged at 25 per cent. That brings the total protection to 98 per cent. Surely that protection should be sufficient to enable a small industry like this to carry on, and to retain its employees. It should be quite adequate for an industry which is making haircloth. The Prime Minister (Mr. Lyons) has stated that our tariff policy will be guided by the recommendations of the Tariff Board. Our policy is, therefore, not as the Leader of the Opposition has stated, to follow blindly the Tariff Board no matter whether it is right or wrong. In this instance the Tariff Board’s report is far superior to that concocted by the previous Government. During the tariff debate, I have at all times endeavoured to treat the items on their merits. I have supported reason- able duties, but, unlike the Country party, I would not support a protective duty of 300 per cent, on tobacco. It is amazing to me that some honorable members, who know little of commercial life, apeak on every tariff item. It would be far better for them to1 accept the advice of the Tariff Board.

Dr EARLE PAGE:
Cowper

– I can assure the honorable member for Balaclava (Mr. White) that we have no enthusiasm for these duties. We stated definitely during the debate on the tobacco item that if the Ministry were prepared to bring down a general reduction of the tariff we would support it throughout, but we will not stand for the crucifixion of country industries when city industries are being given immunity. There are 80 items in the schedule and eleven of them represented increased duties for the protection of city industries. When we come to their consideration I shall show, from the reports of the Tariff Board, the folly of those duties. A certain number of reductions of duties are being made - 5 per cent., 10 per cent, and 20 per cent, in respect of city industries, but in respect of country industries the reductions are greater. The reduction in duty on tobacco was 40 per cent. The duty on this item under the Scullin tariff was ls. 3d. plus 35 per cent. That is now being reduced.6d. or 45 per cent. It may be that that duty is too great. We are prepared to make a general reduction in the tariff, but if the Government picks and chooses and penalizes country industries we shall fight it all the time. This industry is one of the tragedies of tariff making in Australia. The Tariff Board’s report shows that it has no commercial future and no prospect of adopting mass production methods. Yet because of certain tariff-mongering this industry was established. Thousands of pounds raised in the country have been invested in it and 100 persons given employment. Most of them have established their homes at Goulburn. Now we find that the industry is not competent to carry on under reasonable duties, and that the whole scheme will go up in smoke. The Tariff Board, commenting on the industry said -

It does not follow that even with the increased duties the Australian manufacturers will’ secure business to the extent of that represented by importations previous to the operation of such duties. Evidence is conclusive that it will not be practicable to manufacture locally certain of the higher grade haircloths which have been imported. The demand for these grades has been diminishing in recent years and other high quality cloths have been placed on the market. However, high class tailors will continue to import these higher grade cloths in smaller quantities, even if the present duties continue. The most serious reduction in demand will, however, be in regard to the cheaper lines. Figures made available by a large wholesale clothier indicate that over two-thirds of his normal requirements in the past have been for haircloth which could be imported at ls. 4id. or less per yard.

The Board then pointed out that the low grade haircloth is more or less being replaced by canvas, and because of that there will be no real demand for it. Tho report continues -

The foregoing analysis makes it obvious thai the Australian manufacturers cannot hope to secure business sufficient to permit of anything approaching mass production, more especially in view of the wide variety of the demand both as to types and qualities . . .

After examining the position the board stated that no real protection could be given to this industry, but that it had endeavoured to find some means of giving it a protection sufficient to enable it to produce a certain quality of material. I have no complaint about that. What I complain about is the suddenness with which the remedy has been applied. The industry was not responsible for the imposition of these high duties. If the Minister will carry out the undertaking that he has given to submit this matter to the Tariff Board for revision, I shall be perfectly satisfied to vote for the item. I suggest that, if possible, the duties on this industry should be allowed to diminish gradually so as to permit the absorption in other undertakings of its employees at Goulburn and other country centres. I regard this as a striking example of what should not be done in Australia. It emphasizes the fact that we should concentrate on the big industries, particularly those which are likely in the future to meet Australian requirements and to compete successfully with other parts of the world.

Mr MCNICOLL:
Werriwa

– In view of the undertaking of the Minister to submit this matter to the Tariff

Board for reconsideration, I ask leave to withdraw my amendment.

Mr LANE:
Barton

.- The Tariff Board report shows that the original price of haircloth was 7½d. per square yard. The duty of1s. 3d. and 45 per cent. as imposed by the Scullin Government increased the price to about 1s. 7d. The material cannot be worth more than1s. per square yard wholesale. Honorable members can, therefore, see the utter futility of encouraging this industry. The fact that this is a country industry, which if not given sufficient protection, will have to close down, has nothing to do with this particular item. We have been told by the members of the Country party that the existence of this industry in a country rather than a city centre has had. no effect on the price of the material that it manufactures. But let me inform those honorable members that Goulburn would be the last place in which to establish a factory, the manufactures of which had to be distributed throughout New South Wales. The only location for such a factory should be the metropolitan area whence railways radiate throughout the State. It appears that the honorable members of the Country party would like to bargain with the Government to obtain support for industries established in country towns, even to the extent of a protective duty of 150 per cent., as in this case; but are not willing to give similar support to city industries. The honorable member for Calare (Mr. Thorby) put his proposal to the Government in a most specious way. The Country party is evidently out to favour the country, but condemn the city.

Mr FORDE:
Capricornia

.- In view of the assurance of the Minister that he will submit this item to the Tariff Board for report, I shall not object to the withdrawal of the amendment. But I hope that the welfare of the 100 people engaged in this industry will not be jeopardized. I trust, also, that the Minister will take care that large quantities of haircloth are not imported under this provision to the detriment of the local industry. The inquiry by the Tariff Board should be made without delay. When its report is submittedto the Minister I trust that he will carefully consider the recommendations made. Mr. Pratten, the former Minister for Trade and Customs, used to say that he always carefully considered the reports of the board, but did not feel bound to accept them. I hope that the present Minister will not forgo his discretionary power in this regard, nor hand over his responsibilities to an outside body.

Amendment - by leave - withdrawn.

By omitting the whole of sub-item ( h ) and inserting in its stead the following subitem : - “(h) (1) Waterproofed cloth, n.e.i., prepared with rubber, oil, celluloid or nitrocellulose, ad val. - British, 35 per cent.; intermediate, 40 per cent.; general, 50 per cent.

  1. Waterproofed tape or textile strip -

    1. Prepared with rubber, oil, celluloid or nitro-cellulose, ad val. - British, 35 per cent.; intermediate, 40 per cent.; general, 50 per cent.
    2. N.E.I., ad val. - British, free; intermediate, 5 per cent.; general, 15 per cent.”
Mr PERKINS:
Monaro- Assistant Minister · Eden · UAP

– The Government’s proposalsin regard to waterproofed cloth do not alter the rates on those having a wool base, but affect the increases in duty over the 1921-28 tariff rates as follows : - “ Silk or containing silk,” from ad val. British 20 per cent., intermediate 25 per cent., and general 30 per cent. to 35 per cent., 45 per cent., and 50 per cent. respectively, and on “ n.e.i.” from ad val. British 15 per cent., intermediate 20 per cent., and general 25 per cent. to 35 per cent., 45 per cent., and 50 per cent. respectively. The only other alterations to the 1921-28 item are the deletion of the words “ leather cloth “ from its provisions, such goods being now covered by item 105 j, and the addition of the words “nitro-cellulose”. Proofing with nitro-cellulose is a comparatively recent development, and fabrics proofed with this substance are used for the same purposes as those proofed with rubber, oil, or celluloid. Nitro-cellulose fabrics were previously regarded as substitutes for fabrics proofed with rubber, &c., and duty was charged at the rates applicable to rubber-proofed fabrics.

The present proposals bring about the following increases in the existing duty: - “ Waterproofed piece goods other than of wool,” from British 20 per cent., intermediate 25 per cent., and general 30 per cent. to 35 per cent., 45 per cent., and 50 per cent. respectively. The amendments effected are in accordance with the recommendation of the Tariff Board, which submitted its report on 13th September, 1931. Briefly, the principal reasons advanced by the board are -

  1. . It is anomalous to charge duty on waterproofed fabrics in accordance with the nature of the fabrics forming the base of the finished product. By adopting such a basis and charging lower rates on waterproofed silk and artificial silk and cotton a distinct price advantage is given to such waterproofed fabrics as against waterproofed woollen fabrics. This price advantage reacts to the detriment of Australia’s wool-growing industry.
  2. The imposition of revenue duties on practically all of the raw materials used by waterproofers in Australia has increased their costs, and consequential increased duties on the finished product are inevitable. The revenue duties levied cover those on cotton piece goods, silk and artificial silk piece goods, crude rubber and benzine.
  3. An examination of the costs of production statements submitted by waterproofers indicates that the rates recommended arc necessary in order that they may be adequately protected.

Saving regard to the revenue duties imposed on the raw materials, the Government considers that the rates recommended by the Tariff Board are not unreasonable. Waterproofed goods covered by this item are principally used in the manufacture of rainproof garments, particularly overcoats.

Mr NAIRN:
Perth

.- The duties proposed on “ waterproof cloth prepared with rubber, oil, celluloid or nitrocellulose “ are British 25 per cent., intermediate 40 per cent., and general 50 per cent. I move -

That sub-itemH be amended by adding the following to paragraph (1): - “ And on and after 20th May, 1932 -

Waterproofed cloth, n.e.i., prepared with rubber, oil, celluloid or nitro-‘ cellulose, ad val., British, 20 per cent.; intermediate, 25 per cent.; general, 30 per cent.

The material affected by this item is used for the manufacture of raincoats, and is usually imported from England. Both silk and woollen materials are involved in this sub-item. Under the Scullin tariff, the British duty on the woollen material was 35 per cent., and on the silk 20 per cent., which created a peculiar anomaly, for which there appeared to be no justification. Advantage was taken in a rather clever manner of the position so created. One section of manufacturers obtained the promise of an increased duty with the object of excluding competition from another set of manufacturers. There are two classes of manufacturers engaged in this industry - those who proof the material by means of rubber and other products, and those who make it up into garments. Seventy per cent. of the trade consists in the making of the garments, and only about 30 per cent. in the actual waterproofing. The proofers include two big rubber companies and three small companies, which are also engaged in the business of manufacturing the waterproof material into garments. On the 9th July, 1930, an application was made by the waterproofers for very heavy duties. The original application included a request for duties on calico, duck, and so on; but, after it was made, the primage duties came into operation, and the exchange rates altered. The original applicants thereupon wrote to the Minister for Trade and Customs in the following terms: -

For the time being we wish to withdraw our application for increased duty on oildressed calico and duck.

We are doing this in consequence of the added costs that have been imposed on imports of ready-dressed calico and duck by present rates of exchange and other landing charges, which give us increased protection.

Of course, in their trade of proofing, they had the same protection advantage in regard to primage and exchange that they enjoyed in respect of calico and duck, but they desired that their competitors should be removed, and persisted in their application to the board for an increase of duty on waterproofed materials. The Tariff Board made its investigation, and reported on the 13th September, 1931. It refused the extraordinary request for duties, but, to give something to the applicants, because that was apparently in conformity with the policy of the Government of the day, the board dealt with the anomaly that existed in the duties on silken material and woollen material. It indicated that there was every reason why woollen material should be encouraged, and its final decision was that the duties should be equalized. Instead of equalizing the duties down to the level of the 20 per cent. silk, the board raised them to the woollen level of 35 per cent.

The report of the board plainly indicates that its action was half hearted. At page 10 the report reads -

In the matter of justification for increased duty, the main ground advanced on behalf of the applicants was the inability of the locally produced proofed cloth to compete with imported material.

That was the only reason given by the board to support its recommendation, beyond the claim that it would simplify classification from an administrative point of view. The board admittedly did not consult the interests of the public in the matter, for its report contains these words -

There seems little doubt that one effect of the increased duties if imposed would be to increase the cost of proofed materials to garment makers.

And consequently to the public. It is pointed out by the board that the proofing part of this business represents only about 30 per cent, of the total value of the garments. The report states -

The labour in converting a certain quantity of proofed cloth into garments is considerably greater than that involved in the production of the cloth, being in the ratio of 100 to 30. It is, therefore, quite safe to say that from’ the standpoint of providing employment, the garment-making industry is of much greater importance than that of proofing the material.

It will be seen that this’ is one of those exotic industries to which honorable members have referred so frequently, and is subsidiary to the production and manufacture of the garments. When the report was presented, the then Minister held it for three months, apparently unprepared to swallow the recommendations: In January of this year a new Minister came into office. The proofing interests, including the two large rubber companies from Melbourne and Sydney, approached the honorable gentleman, and found him much more amenable to reason than his predecessor, for within a month he had put the increased duties into operation.

I merely ask that the duties should be retained at the rates introduced by the Scullin Government. We have been told that the Scullin tariff was- outrageous, yet the present Government proposes to exceed it in this instance.

Another strong objection that I have to these duties is that the industry that the Government seeks to shut out is British. It is extraordinary that, throughout these changes of duties, attacks are being made on British industries, while industries of the United States of America go free. In this case the industries affected are 95 per cent. British. Soon the Minister for Trade and Customs (Mr. Gullett) will be going abroad on a mission of Empire preference in tariff matters. I have no doubt that he will make many speeches on the subject of the silken tie, and the grand old flag under which we live. He will confer a service on the Mother Country if he gives practical regard to British industries, and confines his attacks to those of the United States of America. Already the protection afforded by the Scullin duties is ample. To that must be added exchange and primage. Surely that is sufficient.

Mr JENNINGS:
South Sydney

– I oppose the amendment moved by the honorable member for Perth (Mr. Nairn). There is a large amount of capital employed in the industries engaged in the manufacture of the materials covered by this sub-item. A large number of persons is engaged in the industry, and a reduction in the tariff may have a serious effect upon employment. Those controlling the factories manufacturing these materials have » to comply with arbitration awards, and other conditions, which do not exist in any other country. For instance, the wages paid in Australia are probably 100 per .cent: higher than those paid in Great Britain, and are certainly in excess of those paid in other countries. Speaking generally, there is a strong line of demarcation between the industrial conditions in Australian factories and those of their competitors. The general industrial policy of Australia has been accepted by the people, and should be taken into consideration in fixing - customs duties. When German or American manufacturers are faced with competition the tariff is immediately raised to afford them sufficient protection. We should do the same thing for our people. In this instance I trust that the committee will accept the recommendation of the Tariff Board, and thus enable this important industry to share in the business offering.

Question - That the amendment (Mr. Nairn’s) be agreed to - put. The committee divided. (Chairman-Mr. Bell.)

AYES: 15

NOES: 33

Majority . . . . 18

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Mr PERKINS:
Monaro- Assistant Minister · Eden · UAP

– The previous Government imposed duties of 35 per cent. British, 40 per cent intermediate, and 50 per cent. general, on all oil baize on the ground that such fabrics were competitive with piece goods proofed locally with nitrocellulose. Undoubtedly, there are certain kinds of oil baize which very closely resemble the locally manufactured leather cloth and nitro-cellulose piece goods, and if admitted at the reduced British preferential rate of 5 per cent., would definitely have a great advantage over the Australian manufactured article. There are, however, many hundreds of lines of oil baize, whichin pattern and design are not competitive with leather cloth. These particular goods are the printed oil baizes sold under such well-known trade names as “ Sanitas,” “ Meritas “, &c., and used on kitchen tables and for lining the walls of rooms. Local manufacture of oil baize is not being undertaken, and the Government decided that the duties on such imported fabrics should be reduced in order to alleviate the burden on the householder. The reduction is made subject to by-law in order that such baize as does compete with Australian produced fabrics will have to pay the higher rate. A very liberal interpretation of what is not competitive has been adopted for the purposes of the by-law, and both -importers and local manufacturers are satisfied with the present position.

Item agreed to.

Progress reported.

page 1079

ACTS INTERPRETATION BILL

Message received from the Senate intimating that it had agreed to the amendments made by the House of Representatives in this bill.

page 1079

COMMONWEALTH BANK BILL

Bill returned from the Senate without amendment.

page 1079

BANKRUPTCY BILL

Bill received from the Senate, and (on motion by Mr. Bruce) read a first time.

page 1079

FORESTRY BUREAU BILL

Bill received from the Senate, and(on motion by Mr. Archdale Parkhill) read a first time.

page 1079

SOLAR OBSERVATORY FUND BILL

Bill received from the Senate, and (on motion by Mr. Archdale Parkhill) read a first time.

page 1079

INSURANCE BILL (No. 2)

Bill received from the Senate, and (on motion by Mr. Bruce) read a first time.

page 1079

ADJOURNMENT

New Guard

Motion (by Mr. Lyons) proposed -

That the House do now adjourn.

Mr JAMES:
Hunter

.-I have no wish to detain honorable members ; but I must take advantage of this opportunity to obtain from the Prime Minister (Mr. Lyons) an answer to an urgent question, seeing that the Government has adopted the policy of declining to answer questions sought to be asked without notice at the beginning of each sitting.

A week ago, the right honorable gentleman stated definitely in this House that a royal commission would be appointed by the Commonwealth to inquire . into charges that had been made against an organization known as the New Guard, as well as counter charges by honorable members of this House to the effect that the police force of New South Wales had been guilty of a “ frame-up “ in connexion with the prosecution of certain individuals for an attack upon Alderman J. S. Garden.

Attention sailed to the state of the House. There being no quorum present,

Mr. Speaker adjourned tha House at 11.13 p.m. (Thursday). .

Cite as: Australia, House of Representatives, Debates, 18 May 1932, viewed 22 October 2017, <http://historichansard.net/hofreps/1932/19320518_reps_13_134/>.